Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

Antares

Mr. Foulkes: To ask the Secretary of State for Defence what is his current estimate for completion of the report of the naval inquiry into the sinking of the fishing boat Antares.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): The naval board of inquiry into the Antares incident was completed in December. Departmental consideration of the board of inquiry report has not yet been completed, but I will make a summary of its findings available to the House in due course.

Mr. Foulkes: Can the Minister give an assurance to the House that the report, and his publication of it, will not shirk from any admission of responsibility for the sinking of the Antares? Will he also confirm that there are no technical reasons why the Clyde reporting scheme, which is proving successful, should not be extended to other fishing areas around our coasts? Since there are no technical reasons why it could not be extended, will he agree now to that extension so as to ensure that another Antares-type tragedy does not take place?

Mr. Hamilton: On the first question, I can certainly assure the hon. Gentleman that the Royal Navy will not shirk responsibility for the incident. That is not really the purpose of the board of inquiry, which is to find out precisely what happened in terms of the actions of the submarine. The hon. Gentleman should have no fear whatsoever on that account. On the second question, there are no technical reasons that I know of why the reporting system covering the Clyde should not be extended. We want to see how the Clyde scheme works out, and then we shall certainly look into whether it should be extended further.

Mr. Bill Walker: Is my hon. Friend aware that the Clyde fishermen find the new scheme to their advantage and welcome it? Like the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I believe that the scheme should be extended wherever practicable. Fishermen on the west coast of Scotland would appreciate that move by the Ministry of Defence if it were possible.

Mr. Hamilton: I am well aware of my hon. Friend's views on that subject and I am grateful for his remarks. The only point that I would make is on the question of our

nuclear deterrent submarines; we do not want it to become clear to the general public when they are transiting out. That is one of the problems with extending the scheme, but we shall consider it.

Mr. Kennedy: Following the Antares disaster, as the Minister said, a scheme has been implemented for the Clyde. He will be aware from contacts that I had earlier today with his private office, which has been very helpful, that there was a near-disaster yesterday off the north of Skye. The incident was similar to what happened to the Antares—a submarine almost destroyed a fishing boat—but mercifully there was no loss of life. Can the Minister give details of that incident and the application of lessons learnt from the Antares disaster in the context of the Minch?

Mr. Hamilton: We should be very careful not to confuse the two issues. What happened on 18 March was not a near-disaster. A Royal Navy submarine, while making a surface transit near to the Raasay range, passed within 80 to 100 yards of the vessel Swyn-Y-Mor. The incident took place in daylight; the submarine had the fishing vessel in sight at all times and took appropriate evasive action as soon as it became apparent that a close pass was likely. Although the submarine tried to raise the fishing vessel on VHF, it did not receive a reply until after the incident had occurred. There was no physical contact between the two vessels or with the trawler's gear.

Tankbusters

Mr. Marlow: To ask the Secretary of State for Defence what lessons have been learned in the Gulf with regard to the relative merits of tanks and helicopters as tankbusters.

The Minister of State for Defence Procurement (Mr. Alan Clark): We are considering the outcome of the campaign and the lessons to be drawn from it, but it is too early to set out definitive conclusions.

Mr. Marlow: Had my hon. Friend been a tank commander in the Gulf, and if he could use his considerable imagination to visualise circumstances whereby, as in any future war, the enemy might have had more overhead cover and concealment, would he have been more fearful of an enemy in Apache. helicopters or in Challenger tanks?

Mr. Clark: Both those arms are essential in the pattern of deployment in the future. There are two teams in the Ministry of Defence studying all the lessons. I have little doubt that they will conclude that both helicopters and battle tanks are needed in any future deployment.

Mr. Rogers: Notwithstanding the relative merits of tanks and helicopters, they are not much use unless they are procured. Does the Minister intend to buy new tanks off the shelf, or will he stop dithering and place an order for the new Challenger and the EH 101?

Mr. Clark: As for the main battle tank, I share the House's devotion to the subject and I hope that the decision will not be delayed too long. The EH101 has nothing to do with the land battle—as the hon. Gentleman's researcher might have told him, it is a naval weapon.

The Gulf

Mr. Jacques Arnold: To ask the Secretary of State for Defence if he will make a statement on the future deployment of British forces in the Gulf.

The Secretary of State for Defence (Mr. Tom King): Security arrangements in the Gulf are primarily for the states of the region. We are ready to play our part if asked, but we do not envisage the permanent stationing of British ground forces in the area.

Mr. Arnold: Does my right hon. Friend agree that the achievement of our armed services in the Gulf during the past seven months will rank among the greatest campaigns in the history of the British armed forces? Does he also agree that the manner in which the campaign was planned and executed can be judged by the low level of casualties sustained by the British forces? Now that our service men are returning from the Gulf, will he give an assessment of the dangers of a delay of that return which may arise from the chaos and bloodshed now occurring in Iraq?

Mr. King: I am grateful to my hon. Friend for his tribute to what was a remarkable team effort by all the armed forces and by those who supported them in industry and in the country as a whole. We are now moving very quickly towards the withdrawal of our forces. They are coming home at the rate of about 1,000 a day and they are certainly receiving a very warm welcome. We intend to proceed with the withdrawal, subject to satisfactory progress in terms of the ceasefire.

Mr. Alfred Morris: In what circumstances does the Minister envisage that hostilities against Iraq could be resumed?

Mr. King: The suspension of hostilities has occurred only recently. Clearly, we are watching developments very carefully. We want to see peace and security in the area—that was part of our objective in going there. At the moment, we do not see any circumstances in which we should become involved again.

Mr. Cyril D. Townsend: Does my right hon. Friend agree that the coming together in Damascus of eight Arab members of the coalition to produce defence plans for the Gulf gets the defence of the region off to a good start, while recognising the need for Britain to have maritime and air forces there? Can my right hon. Friend tell us anything about the future stockpiling of heavy equipment?

Mr. King: My hon. Friend is right to draw attention to the success of the Damascus meeting and of the communiqué which recognised the role that could be played by Egyptian and Syrian forces as the nucleus for security in the area. We have certainly made clear our willingness to play our part and we are in close discussion with our allies and friends in the area to consider the most helpful way to do that—[Interruption.]

Mr. Speaker: Order. I appeal to the House to listen to Defence questions as they are very important.

Nuclear Submarines

Mr. Andrew F. Bennett: To ask the Secretary of State for Defence what exchanges of information have taken place with the United States of America Government about systems for, and experience in, decommissioning of nuclear-powered submarines.

Mr. Alan Clark: There is a regular exchange of information between the United States and United Kingdom Governments under the 1958 mutual defence agreement and we are generally aware of each other's views.

Mr. Bennett: Does the Minister agree that an important principle of parliamentary government is that Ministers do not mislead the House? Can he therefore explain how Ministers continue to tell us confidently the cost of the Trident programme when it appears that neither Britain nor the United States knows what the cost of decommissioning a nuclear submarine would be? As they do not know how to do it, how can Ministers tell us how much it costs?

Mr. Clark: Decommissioning is not included in the costs of acquisition. The hon. Gentleman may be confusing decommissioning with disposal. Decommissioning is a recognised procedure which involves removing the fuel and various ancillary items to make the vessel relatively safe so that it can be stored afloat until its fate is decided.

Mr. Wilkinson: Can my hon. Friend tell the House what exchanges took place between the United Kingdom and United States Governments about the British "Options for Change" exercise whereby the number of Royal Navy nuclear attack submarines is to be substantially reduced, what the United States advised about the reduction of our capability in that area and whether advice was sought from the United States on the disposal of hulls?

Mr. Clark: Advice from the United States was not sought on the disposal of hulls. We are perfectly capable of making decisions independently. Reductions in future deployment under the "Options for Change" scheme are a matter for consultation with all our NATO allies, including the United States.

Mr. Boyes: Is not it incredible that, after all this time, the Government still cannot come up with a solution acceptable to the British people for the decommissioning of nuclear submarines? Such a solution clearly excludes dumping at sea, which is the worst possible option. It is clear that there has been no new thinking from the Government, although a range of options have been researched by the Opposition. All that we get is a faltering Minister in a vacillating Government led by a tired and dithering Prime Minister.

Mr. Clark: Who is the hon. Gentleman to claim to speak for the British people? I am wholly unaware of any concern being expressed to me by any member of the British public about the disposal of nuclear submarines. Neither I nor my Department has had a single letter about that in the past year.

The Gulf

Mr. Cran: To ask the Secretary of State for Defence what further progress has been made in his Department's review of Britain's defence commitments; and what lessons have been learned as a result of the Gulf war.

Mr. Tom King: We believe that there is scope for changing our defence arrangements following the collapse of the Warsaw pact and the unification of Germany. Some initial decisions have already been announced, but the final size and shape of our armed forces will need to take account of our consultations with NATO and our allies, the security position in Europe and with the Soviet Union, and progress on arms control. We shall also need to take account of the lessons learnt in the Gulf.

Mr. Cran: Does my right hon. Friend agree that the most important lesson of the Gulf war is that the United Kingdom must hold unto itself the decision on when to commit its armed forces? Will he further agree that if we had been part of a common defence arrangement in Europe we would probably not have been able to make a contribution to collective security?

Mr. King: I certainly believe, as the lessons of the Gulf have shown, in the importance of having allies with whom we can work closely, and in the benefits of a coalition in such circumstances. I also strongly support the need for us to have the power to act and, first, to be able to take the decision to act. The other important aspect, which I know that my hon. Friend will support, is to have the power to act and to have forces able to act and to make such a valuable contribution.

Mr. Menzies Campbell: Does the Secretary of State agree that the commitment of the United Kingdom must depend on the nature of the threat that it may have to meet? In that regard, does he share my concern that the Soviet Union launched more submarines last year than in the previous year and there are reports that it has now placed 10,000 tanks east of the Ural mountains, apparently to frustrate the effects of the conventional arms reduction treaty? Will due account be taken of those factors in assessing the commitments of the United Kingdom?

Mr. King: The hon. and learned Gentleman will have noticed that that point is precisely one of the aspects with which I dealt in relation to the progress of arms control. One of our concerns is the number of Soviet tanks transferred from the Soviet army to the Soviet navy, putting them outside the remit of present arms control and leading to a situation in which, as is well known, the Soviet navy now has more tanks than the British Army. We have raised those issues. My right hon. Friend the Prime Minister raised them very directly on his recent visit to Moscow. That is precisely why we have not ratified the conventional forces reduction in Europe treaty.

Mr. Onslow: Will my right hon. Friend assure the House that, whatever reviews take place, his Department will not lose sight of the importance of our reserve forces and especially of the Territorial Army?

Mr. King: I very much agree with my right hon. Fnend. I refer the House to my statement last July, in which I said:
The volunteer reserves continue to play a key role, and we wish to consider the appropriate numbers for the future,

having regard to our needs and realistic levels of recruitment and retention."—[Official Report, 25 July 1990; Vol. 177 c. 472.]
The whole House recognises the valuable role that the reserves and the volunteer reserves have played as recently as in the Gulf campaign. That underlines the importance of the role that they can play.

Mr. O'Neill: What other out-of-area threats do the Government envisage having to meet? How relevant would armoured divisions be in such circumstances? Following the destruction of the fourth largest army in the world—the Iraqi army—few countries, surely, could pose a threat equal to that posed by Iraq in the recent past.

Mr. King: It is incredible that the hon. Gentleman—the Opposition Front-Bench spokesman—should conclude that we shall not be forced to face any further armoured threat in the world. The lesson to be drawn from the Gulf and, indeed, from the very fact of the difference between that threat and the threat that we faced in the Falklands, is that we must be prepared for the unexpected and able to make our contribution, whatever shape the threat may take.

Ministry Houses

Sir David Mitchell: To ask the Secretary of State for Defence what assessment he has made of the adequacy of the arrangements for temporarily leasing empty MOD houses to local authorities to assist in their duty to provide accommodation for the homeless; how many houses on the MOD estate at Barton Stacey have been empty for more than six months; and what percentage of the estate this represents.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Kenneth Carlisle): I am generally satisfied that the arrangements for temporarily leasing empty MOD houses to local authorities are adequate. We currently have more than 600 properties on lease throughout the United Kingdom, and we have recently offered a further 700 properties for leasing to 13 separate authorities, including Test Valley borough council in my hon. Friend's constituency. Sixteen houses on the MOD estates at Barton Stacey have been empty for more than six months, representing 12 per cent. of the MOD estate. Of those 16 properties, 11 are in the process of being sold.

Sir David Mitchell: I do not share my hon. Friend's satisfaction with the information that he has given. On 4 February, 20 per cent of the houses on the MOD estate were vacant, while the borough council's figure was 1 per cent. Will my hon. Friend overhaul the whole system of management, which is at present inadequate?

Mr. Carlisle: Where houses are not needed, we sell the surplus; however, we require a management margin of 9 per cent. As my hon. Friend knows, we cannot keep a waiting list for Army families, who move around every two months, whereas local authorities can build up substantial waiting lists.

The Gulf

Mr. Nellist: To ask the Secretary of State for Defence if he will make a statement about the timetable for withdrawal of British troops from the Gulf.

Mr. Tom King: British forces are now being progressively withdrawn from the Gulf. In the next two weeks, further ships, 7th Armoured Brigade Group and the bulk of the RAF combat aircraft will return. The precise timing of the return of other units will depend on progress on the ceasefire and other factors.

Mr. Nellist: In an earlier answer, the Secretary of State told us that troops were returning at a rate of about 1,000 per day, so their return should be complete by about the end of April. What is the Government's view of the insurrection now taking place in Iraq, especially in the north and the south-west? Is it the same as the view of the United States Government which, according to a report in The Guardian last week, seems to boil down to "Better the devil you know than a weak coalition or a new strong man", or do the Government welcome the fact that the people of Iraq are dealing with their own problems and trying to fight for democracy?

Mr. King: The government of Iraq, and the choice of who should govern, are matters for the people of Iraq.

Mr. Bellingham: As some of the forces are already returning from Iraq, will my right hon. Friend find time today to pay a further tribute to the three squadrons from RAF Marham in west Norfolk who played a superb role in the conflict? Will he also reflect on the fact that if the hon. Member for Coventry, South-East (Mr. Nellist) had had his way there would have been no British forces in the Gulf to withdraw?

Mr. King: I note that the hon. Member for Coventry, South-East (Mr. Nellist) has changed the thrust of his questions. My hon. Friend is right—the liberation of Kuwait would not have been achieved without the determination of the Government and the coalition to ensure that in the final analysis, if peaceful means and diplomacy could not prevail, we were prepared to use force. I join my hon. Friend in paying tribute not only to RAF Marham, whose forces and units made an outstanding contribution, but to all our forces and to the coalition forces for the part that they played in using the force that was necessary.

Dr. Reid: Last Saturday in Devon the Secretary of State said that the priority was to get the troops home and give them the welcome and thanks that they deserved. Does he accept that many of the young men and women returning home face an uncertain and insecure future because of possible cuts in armed services numbers as a result of "Options for Change"? Does he agree that the thanks and welcome that they deserve is a Government guarantee that adequate retraining will be provided for those who may face re-entry into civilian life? Does the Secretary of State accept that the existing 28 days pre-release training is woefully inadequate and is it not time that he gave the armed services a real vote of confidence by announcing plans to augment the already meagre measures for retraining?

Mr. King: I understand entirely the hon. Gentleman's point about the need to give reassurance and confidence to our armed forces after the part that they have played. I am interested that the hon. Gentleman chooses to ask that question from the Opposition Front Bench. Whatever changes we may think modest and possible within the

changed security environment are as nothing compared with the changes that the Opposition would impose if their defence cuts were ever implemented.

Mr. Brazier: Does my right hon. Friend agree that although it is a high priority to bring as many of our service men as possible home as quickly as we can from the Gulf, where they have done such a splendid job, the situation in the Gulf is likely to remain unstable for a very long time, even if the shooting stops, because of the many different, powerful and, in many cases, unpleasant groups there, so the Government will have to consider maintaining a presence in the Gulf for a very long time?

Mr. King: Whatever the longer-term future may hold, the immediate present is very uncertain. We are monitoring the situation and making it clear that the completion of our withdrawal will depend on a satisfactory agreement being reached on a formal ceasefire. We have not yet achieved all our objectives, but in the longer term we shall keep the issue to which my hon. Friend referred under review. We do not envisage having ground forces in the area, but I have already said that we shall have a naval presence there and that we shall wish to keep in very close defence contact with our friends and allies in the area.

Service Men (Personal Lives)

Mr. Campbell-Savours: To ask the Secretary of State for Defence what aspects of the personal life of service men are taken into account in matters of recruitment and dismissal from employment in Her Majesty's forces.

Mr. Archie Hamilton: The armed forces seek recruits whose personal qualities are such that they will ensure that the high standards of our professional, volunteer services are maintained. Applicants must demonstrate that they are able to integrate within the services and cope with the rigours of service life. Service personnel who commit offences against the services discipline Acts, or who are judged unsuitable for service life, may be dismissed or discharged.

Mr. Campbell-Savours: Do the Minister and his colleagues remember the case of Miss X in my constituency who was dismissed for her alleged sexual preferences? In so far as Miss X has repeatedly denied those allegations—as, indeed, has her boy friend—can a full inquiry be held into what actually happened, as it seems clear to me that a grave injustice has been done?

Mr. Hamilton: I think that the best thing that the hon. Gentleman can do is to write to me about the case, as I have no intimate knowledge of it. If he does so, we shall certainly look into it.

Mr. Mans: In relation to recruitment and retention in the services, will my hon. Friend comment on the sending of soldiers under the age of 18 into combat zones?

Mr. Hamilton: It has always been the practice of the armed forces to send people who are fully trained into combat. It is quite possible for people under the age of 18 to be fully trained. We should not sent them into combat unless they were.

The Gulf

Mr. Terry Fields: To ask the Secretary of State for Defence if he will enumerate the financial costs of deployment of British armed forces in the Gulf up to the end of the Gulf war.

Mr. Tom King: As so far assessed, the additional costs of the Gulf conflict are about £1·75 billion. The eventual costs will be significantly higher—possibly up to £3 billion, spread over several years. I am discussing the provision for those additional costs which fall in 1991–92 with my right hon. and learned Friend the Chief Secretary to the Treasury. Implications for defence spending from 1992–93 will be considered in the normal way later this year.

Mr. Fields: The figures show the Secretary of State's obvious influence in Cabinet when arguing for such sums of money to remove the obscenity of Saddam Hussein from Kuwait. Will he now use that same influence to remove from British society the obscenities of homelessness, poverty and hospital waiting lists and to enable pensioners and others on income support not to have to pay the poll tax—or are those simply areas of collateral damage and thus insignificant?

Mr. King: I am grateful to the hon. Gentleman, at least for the first part of his question. It was the first time that I have heard him pay tribute to the work of our forces or recognise the need for us to take the action that we did for the liberation of Kuwait. The other issues obviously go a little wide of the question.

Mr. Tim Smith: What progress has my right hon. Friend made in obtaining contributions from overseas towards the cost of the war?

Mr. King: My right hon. and learned Friend the Chief Secretary has been the most active in that area. We have received significant contributions, amounting to in excess of £1·25 billion, and we hope for further contributions from our allies who very much appreciate our contribution to the liberation of Kuwait and the costs involved.

Mr. Tony Banks: We could have saved even more money by not fighting the war at all. One of the best ways of guaranteeing that we do not get into such wars is to ensure that unpleasant people such as Saddam Hussein are not given arms by western nations. For future reference, will the Secretary of State tell us what support he is giving to President Bush, who said that there will be a moratorium on arms exports to the middle east? Will he give an assurance in the House that we shall not, under any circumstances, authorise any arms exports to anyone in the middle east from now on?

Mr. King: That is a particularly silly supplementary question—but well above the hon. Gentleman's usual standard. He knows perfectly well—he has been told this on a number of occasions—that we have strict licensing requirements for the export of arms. He knows perfectly well that we have not sold arms to Iraq for a number of years, for precisely the reason that he has in mind. He also knows perfectly well that some of the arms that we have sold, especially to Saudi Arabia, Bahrain, Kuwait, Oman and the United Arab Emirates, helped in the campaign to liberate Kuwait.

Relocation Projects

Mr. Holt: To ask the Secretary of State for Defence how many man hours have so far been spent by Ministry of Defence officials in evaluating relocation projects within his Department; and if he will make a statement.

Mr. Kenneth Carlisle: Since 1979 my Department has evaluated, or is evaluating, 25 separate relocation projects involving nearly 25,000 posts. Those studies have involved many areas of the Department, although most of the detailed work is done at local level. No central record is kept of the man hours involved in this work.

Mr. Holt: I am grateful to my hon. Friend for that reply and especially for the details of the number of relocation exercises that have been considered in the past 10 years. Apart from being considered, how many of those projects have reached fruition and how many people have been relocated?

Mr. Carlisle: About 2,500 people have already moved and we are looking at a number of other projects. A further 6,500 people are expected to move by 1995 and nearly 2,000 are under review for movement thereafter.

Mr. Frank Cook: How long will it take to give the constituents of Stockton a clear idea about the relocation of the directorate general of the defence quality assurance unit from Woolwich to Stockton?

Mr. Carlisle: I am delighted to see the hon. Gentleman in his place again in good health. I am fully aware of his interest in Stockton, as well as that of my hon. Friend the Member for Stockton, South (Mr. Devlin), both of whom brought an all-party delegation to see me. I am aware of the claims of the north-east to be the new home of the quality assurance organisation, but I shall not make any decision until our studies are complete, which I expect to be soon. We have a public duty to ensure that every relocation is truly cost effective.

The Gulf

Mr. Adley: To ask the Secretary of State for Defence what lessons his Department has learnt from the Gulf war.

Mr. Archie Hamilton: We are considering the outcome of the campaign and the conclusions to be drawn from it, but it is too early to say how the results of the work might be made public.

Mr. Adley: Having listened to the exchanges of the past half hour, my hon. Friend will understand why I have decided to change my supplementary question somewhat. Does he agree that the views expressed by not only Labour Back-Benchers but Opposition Front-Bench spokesmen make it clear that, if by any awful mischance, Britain ever found itself dependent on Ministers in a Labour Government for the defence of the realm, it would be wise at least to order a large supply of white flags?

Mr. Hamilton: There is no doubt whatever that if, by some misfortune, the Labour party won the next election, our defence capability would be reduced drastically. In the light of recent experience, that would be a great mistake.

Mr. Strang: Does the Minister accept that whatever lessons are to be learnt from the Gulf, they will not alter


the main priority of our defence budget, which is to maintain the defence of these islands? In that context, will he reaffirm the Government's commitment to the important role that the European fighter aircraft will play as a defensive conventional war plane? Will he take every opportunity in the years ahead to urge the continued support of the three other European partners in the project?

Mr. Hamilton: We shall continue to urge our European partners to support the EFA. Our commitment to it is total. There can be no question about that. Not only conventional weapons have an important role; nuclear weapons have also done much to defend Europe in the past. They should continue to do so and Britain should continue to have its own independent deterrent. I am sad that so many people on the Opposition Benches believe that we should negotiate it away.

"Options for Change"

Mr. Ian Bruce: To ask the Secretary of State for Defence if he will make a statement on the implications for south Dorset of the "Options for Change" review.

Mr. Archie Hamilton: We are examining the scope for rationalising a wide range of defence support activities. No decisions affecting south Dorset have yet been taken.

Mr. Bruce: I thank my hon. Friend for that answer. Does he agree that the armed forces are masters of the diversionary tactic? Does he agree that when Ministers ask for reductions, they are offered relocations and collocations? Will he consider all the jobs in south Dorset and realise that he is being conned? If he wants reductions, he should examine the parts of the armed forces where reductions are needed rather than the parts that he has already decided that he intends to keep. Is he aware that the cost of moving some parts to other areas will be enormous?

Mr. Hamilton: We are looking at a wide range of defence real estate across the country. It is true that in south Dorset there are significant amounts of defence estate. We must consider that in common with everything else. I repeat that no decisions have yet been taken. [Interruption.]

Mr. Speaker: Order. Will the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) come into the Chamber so that we can perhaps get on with Question Time?

Mr. O'Neill: When considering the implications for south Dorset, will the Minister of State also remember that there are other naval bases as well as that at Portland, which seems to be the subject of consideration under the "Options for Change" process? Does he agree that it is desirable to conduct the process openly, rather than its being the subject of rumours and leaks which cause unnecessary anxiety to the communities involved? Will he include Rosyth with Portland when he says that no decisions have been taken and no conclusions reached on closures?

Mr. Hamilton: That is why, when people came to see me about Rosyth, I assured them that we were considering all the naval bases and naval support across the board. That confirms what I have been saying to people who are

worried about Rosyth. There is no singling out of Rosyth. We are considering naval support across the board. [Interruption.]

Mr. Speaker: Order. I ask hon. Members to listen to the last few minutes of Defence Questions.

The Gulf

Mr. Wilshire: To ask the Secretary of State for Defence if he will make a statement on the current military situation in the Gulf.

Mr. Tom King: Following the defeat of the Iraqi army in Kuwait, the coalition suspended offensive combat operations, subject to clearly laid down conditions. These included the immediate return of our prisoners of war and of the remains of those who lost their lives. In advance of any agreement on a final ceasefire, coalition forces have been clearing the battlefield; naval forces have been continuing their mine-clearing operations; and air forces have been maintaining defensive air patrols. At the same time, we have begun the phased withdrawal of some of our forces.

Mr. Wilshire: Does my right hon. Friend agree that Saddam Hussein's barbaric use of force against his own people proves that he still cannot be trusted? In the circumstances, does he also agree that there can be no lasting peace in the middle east until the coalition forces have satisfied themselves that there are no chemical or biological weapons left in Iraq?

Mr. King: I certainly accept that we cannot trust Saddam Hussein. We have made that very clear and by the use of force we have now liberated Kuwait. I assure my hon. Friend that the importance of eliminating Saddam Hussein's nuclear, biological and chemical capability is something to which we attach the greatest importance.

Mr. Tom Clarke: Did the Secretary of State see the excellent but disturbing report by Charles Wheeler on "Newsnight" last night? Does he agree that the oppression of Palestinians in Kuwait is totally unacceptable? Does he agree that any oppression in Kuwait is completely unacceptable and that that was not the reason for the presence of British troops in the Gulf?

Mr. King: In response to an earlier question, I paid tribute to the role of our reservists in the Gulf and their ready willingness to play their part in that important conflict. I should like to welcome back my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) and thank him for the contribution that he made, like many of his colleagues, who so gladly responded to the call for reservists.
To answer the hon. Gentleman's question, when I was in Kuwait I made the strongest representations to the Kuwaiti Government about the need to ensure justice and fairness for all the people in the area. I said that we went to liberate Kuwait, to free it from intolerance and cruelty, and that we do not want intolerance and cruelty perpetuated there in any way.

USAF Fairford

Mr. Simon Coombs: To ask the Secretary of State for Defence what information he has about the future use of USAF Fairford.

Mr. Archie Hamilton: The temporary deployment of United States B52 aircraft to RAF Fairford in support of Operation Desert Storm has now ended. The station remains available to the United States air force as a standby facility. In the short term, United States tanker and transport aircraft may continue to use RAF Fairford in support of the withdrawal of United States forces from the Gulf region.

Mr. Coombs: My hon. Friend will be well aware of the excellent contribution made by USAF Fairford to the allied effort in the Gulf. He may also be aware that this has generated considerable uncertainty in the vicinity of the base. Will he undertake to discuss with our allies in the United States the future of the base so as to be able to make a clear statement of intent for the longer-term future?

Mr. Hamilton: We are in discussions with the United States air force about this, but current plans are that it should continue as a standby base and be used for exercises. I do not think that it will go beyond that.

Contracts

Mr. Martyn Jones: To ask the Secretary of State for Defence what percentage of contracts awarded by the Ministry of Defence go to British-owned companies.

Mr. Alan Clark: The Ministry of Defence does not maintain contract statistics on the basis of the ownership of companies but by the location where the majority of the work is to be undertaken. Taking into account our share of international collaborative programmes, around 90 per cent. of the defence equipment budget is spent with companies in the United Kingdom.

Mr. Jones: Should not we spend 100 per cent. of our money in this country, bearing in mind the fact that we are in a recession created by the effect of eleven and a half years of Tory misrule on the economy and the fact that we have the biggest-ever balance of payments deficit? Will he make efforts to do so in the future?

Mr. Clark: I reject that argument. The figure of 90 per cent. represents an excellent tribute to the competitiveness of British industry. My Department searches constantly for the best value for money in weapons procurement. That is our obligation to the hon. Gentleman's constituents who pay their taxes and to the whole of the public. We look for value for money by objective criteria and, as I say, it testifies to the competitiveness of British industry that it managed to reach the 90 per cent. total.

Mr. Batiste: Does my right hon. Friend agree that British defence companies need clearly defined time scales against which to commit their expenditure? In that context, when will he be in a position to announce the decision for the replacement of the Chieftain tank, bearing in mind the outstanding performance of the Challenger tank in the Gulf war?

Mr. Clark: It is perfectly true that not only did the Challenger tank perform extremely well, but the whole support operation provided by the manufacturers was of the highest quality. I hope that a decision on the replacement of the Chieftain will not be delayed too long.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Trotter: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening, I hope to have an audience of Her Majesty the Queen.

Mr. Trotter: Will my right hon. Friend confirm that when he visited the Gulf he heard the Challenger 1 tank had performed very well and that the Vickers work force gave stalwart support to the Army before and during the conflict? Does he agree that the new Challenger 2 is designed specifically for the British Army's requirements and that it meets them? Will those factors be given due recognition and is he aware of the need for an early order if Vickers is to maintain its manufacturing capability and win export orders for this world-beater?

The Prime Minister: Yes, I confirm what my hon. Friend says. The performance of the Challenger 1 tank in the Gulf was quite outstanding. Before we reach a decision on the replacement—on a Challenger 2 tank—we must analyse the lessons that we learnt in the Gulf. I hope that that will soon be done and then we shall move speedily to a decision.

Mr. Kinnock: Does the Prime Minister recall saying recently:
Michael's claim of taking education from the poll tax and putting it into central education has … the disadvantage that it has to be paid for elsewhere, either in more borrowing, more taxation, or pre-empting money that would otherwise go to the health service"?
Is that still the Prime Minister's view?

The Prime Minister: Government services have to be paid for, from whatever pocket they may come, and that is still the case.

Mr. Kinnock: I know all about that—[Interruption.]—but from the way the Government are behaving, one wonders whether they know all about that, too. Will the Prime Minister now answer my question? Does he still take the view that he enunciated a short time ago, or does he now agree with Michael? If he does not, is he still dithering in between?

The Prime Minister: I am glad to hear the right hon. Gentleman confirm that he knows that local government services have to be paid for. I just wish that he would tell some of his hon. Friends that—[HON. MEMBERS: "Answer."] The right hon. Gentleman will have all his answers by the end of this week.

Dr. Goodson-Wickes: Does my right hon. Friend accept that my appalling voting record over the past few months is no reflection on my wholehearted support for him and the Government?
On a more serious note, does my right hon. Friend agree that the united voice that went out from the House in support of our troops on the ground in the Gulf was of


immeasurable help to them and that that, combined with the unsurpassed military leadership under which we served, led to the magnificent military outcome?

The Prime Minister: I agree entirely with my hon. Friend. I think that I echo the views of the whole House in saying that in recent weeks my hon. Friend has been in the right place. We welcome him back to the House—to the place which is his by right.

Mr. Ashdown: If the Prime Minister will not recall his own words, will he recall the words of his predecessor, who, speaking in the House on 15 November for a Government in which he was Chancellor of the Exchequer, said that transferring education expenditure to central Government would result in huge tax increases and in a reduction in local services? Does the right hon. Gentleman still agree with his right hon. Friend?

The Prime Minister: There are many things about which I am in wholehearted agreement with my right hon. Friend the Member for Finchley (Mrs. Thatcher). Those things include clear opposition to proportional representation and a reluctance to do deals with the right hon. Gentleman.

Mr. Simon Burns: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Burns: Is my right hon. Friend aware that more than 12,000 of my constituents travel by British Rail from Chelmsford to Liverpool Street every day? Does he accept that although the service has improved somewhat in the past few years, it still leaves a great deal to be desired? Can he reassure my constituents that the current record levels of investment in British Rail will continue, so that services may be improved further?

The Prime Minister: I sympathise with my hon. Friend. I know that the views of his constituents are shared by my constituents and by the constituents of many other hon. Members. The Government's investment priority is to ensure that all routes are brought up to the high standard that commuters have a right to expect. That is, and has been, our policy.

Mr. Mullin: Will the Prime Minister take this opportunity to welcome the release of the six innocent men who were convicted of the Birmingham pub bombings? Does he agree that if confidence in our judicial system is to be restored it will be necessary for someone above the rank of police sergeant to take responsibility for the recent series of disasters?

The Prime Minister: No one in the House either now or at any time in the past, would have wished to see innocent men gaoled. As the convictions were insecure, it is entirely right that the gentlemen to whom the hon. Member referred have now been released. The whole House will be pleased about that. Clearly, we need to look at procedures. The royal commission on the criminal justice system will report speedily and comprehensively.

Mr. David Nicholson: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Nicholson: My right hon. Friend will recall personal tax rates of up to 98 per cent., a standard rate of 35 per cent. and weird taxes such as selective employment tax. However deep our party's hostility to those taxes might have been, no one doubted that they had to be collected and that they had to be paid. Is my right hon. Friend aware that my constituents in Taunton, where the community charge has been collected efficiently, are of the opinion that until the House changes tax measures, public authorities will have a duty to collect taxes and individuals, including hon. Members, will have a duty to pay them?

The Prime Minister: My hon. Friend is absolutely right. Everyone has a duty to uphold the law as passed by the House. That is particularly true of hon. Members. Those who seek to make the law should never break the law.

Mr. Andrew F. Bennett: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Bennett: Does the Prime Minister agree that an important principle of British public life is that when the Ministers or other senior public figures make grave errors of judgment they resign? In doing so, they restore confidence in their office and they salvage a little of their reputation. Will the Prime Minister draw that principle to the attention of Lord Chief Justice Lane?

The Prime Minister: I shall certainly not draw that to the attention of Lord Chief Justice Lane. I believe that he applied the facts of the case as he saw them; hindsight knowledge is never an attractive thing.

Mr. Barry Field: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Field: Recognising the long hours worked during the Gulf war by my right hon. Friend and the distinguished service—[Interruption.]

Mr. Speaker: Order. This takes up a lot of time.

Mr. Field: —and the distinguished service given by my hon. and gallant Friend the Member for Wimbledon (Dr. Goodson-Wickes), may I invite them both to partake of the invigorating political air of the Isle of Wight during the Easter recess, where they will observe that the Conservative borough councils of South Wight and Medina have transferred all their housing stock to housing associations, making the Isle of Wight a unique county?

The Prime Minister: My hon. Friend makes a tempting offer. If I may deal with the underlying concern of his point, to paraphrase Mr. Samuel Clemens, reports of my death have been greatly exaggerated. I know that my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) and I would welcome my hon. Friend's invitation.

Mr. Salmond: Will the Prime Minister confirm that he told his Back Benchers yesterday that the Achilles heel of the poll tax was its uncollectability? Will he therefore acknowledge that the campaign of resistance to the tax has


been a key factor in sinking his predecessor's flagship? When the Government make their statement on Thursday, will it contain any form of apology to the people of Scotland for the additional year under which we have suffered from this iniquitous tax?

The Prime Minister: I will confirm no such thing and if the hon. Gentleman played any part in any campaign of disobedience, he has no right to be in the House.

Mr. Haselhurst: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Haselhurst: Does my right hon. Friend accept that London commuters generally will welcome the increased emphasis that the Government are putting on the quality of service in rail transport? As the Stansted airport rail link starts, from today, to place heavier burdens on the infrastructure of the West Anglia line, can commuters there hope that their interests will not be subordinated to the interests of airline travellers?

The Prime Minister: As my hon. Friend knows, improvement in quality is very much the objective of the Government's policies and of British Rail. He will know that modern rolling stock has been provided for the Stansted express and is intended to provide both fast and frequent services to the newly expanded airport. I shall draw my hon. Friend's concerns about normal commuter services on the West Anglia line to the attention of my right hon. and learned Friend the Secretary of State for Transport.

Mr. Lofthouse: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Lofthouse: Will the Prime Minister tell us why he recently said that the poll tax would prove to be enduring and would be a vast improvement on the rates? As he appears rapidly to have changed his mind, does he expect the right hon. Member for Finchley (Mrs. Thatcher) to change hers, too?

The Prime Minister: The hon. Gentleman will find the answers to all those questions on Thursday.

Mr. Bowis: To ask the Prime Minister if he will list his official engagements for Tuesday 19 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Bowis: Has my right hon. Friend had time to read the editorials pointing out that if Wandsworth had received the same amount of Government grant as neighbouring Lambeth, it could have put a cheque in the post to every charge payer? Does he agree that the lesson to be drawn from that is that whatever system of local government finance we have, the only one worth voting for is one run by Conservative councils?

The Prime Minister: My hon. Friend makes a valid point——

Mr. Meale: No, he does not.

The Prime Minister: Yes, he does. Lambeth received almost £300 a head more in external grant than Wandsworth, yet most Wandsworth residents seem to think that they get better services than do the residents of neighbouring Lambeth. The reason is clear: Lambeth is a Labour council and that is why the service is so expensive and so rotten.

Mr. Clelland: Although I fully appreciate the need to review defence procurement policy following the Gulf conflict, does the Prime Minister agree that that would affect only the size of the order for main battle tanks, not necessarily the manufacturer which will provide them? Will he therefore have a word with the Secretary of State for Defence with a view to making an early announcement that the order will go to a British manufacturer, Vickers Defence Systems?

The Prime Minister: I understand the hon. Gentleman's point and we shall seek to learn all the lessons possible from the Gulf conflict. As soon as it is concluded, we shall endeavour to reach an early decision. I hope that there will be no unnecessary delay.

Mr. Nelson: Will my right hon. Friend find time to reaffirm the Government's strong commitment to defence? Does he agree that one reason why our armed forces did the job in the Gulf was that, over the past 10 years, the Conservative Government have voted and spent the necessary money for the right equipment and training, while the Opposition parties have constantly called for disarmament and defence cuts?

The Prime Minister: I happily reaffirm that. Defence remains a matter of intense importance to this side of the House and, in case there is any doubt, I should make it clear that that includes nuclear defence.

WAYS AND MEANS

Budget Statement

Mr. Deputy Speaker: Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that, at the end of the Chancellor's speech, copies of the Budget resolutions will be available to hon. Members in the Vote Office.

The Chancellor of the Exchequer (Mr. Norman Lamont): Like, I suspect, most Chancellors, I have found the preparation of this, my first Budget, very exciting. As usual, I have read a huge amount of speculation in the press over the past few weeks about the contents of the Budget. I have also learnt a number of interesting things. For example, I was surprised to read last Wednesday that I am almost as well known as Desert Orchid—and I have not yet run in the Gold Cup.
Actually, Desert Orchid and I have much in common: we are both greys; vast sums of money ride on our performance; the Opposition hope we will fall at the first fence; and we are both carrying too much weight. The crucial difference is that Chancellors are never favourites.
I have had the advantage of serving at the Treasury under two Chancellors: my right hon. Friend the Prime Minister, who last year delivered a notable Budget for savers, and before that my right hon. Friend the Member for Blaby (Mr. Lawson). If I may make a personal observation, working for my right hon. Friend the Member for Blaby was always stimulating and exciting, and I am extremely grateful for his encouragement over the years. My admiration and respect for him remain undimmed.[ Interruption.]

Mr. Deputy Speaker: Order. I know that this is an exciting day in the House, but perhaps we should try to behave like the mother of all Parliaments.

Mr. Lamont: I intend to carry forward my predecessor's work. My central economic aim is to bring inflation down and keep it down. Beyond that, my objective is to encourage enterprise by creating a broadly based tax system that allows markets to do their job with the minimum of distortion and Government interference.
Although there is no scope this year for an overall reduction in taxes, my Budget today will include measures to help business through the recession in the short term and to encourage it to invest for the longer term. It will provide assistance for families. It will also further the process of tax reform and make some radical changes in the tax system.
As usual, I shall begin with a review of the economic situation and prospects. I shall then deal with monetary policy and public finances. Finally, I shall present my tax proposals.
The "Financial Statement and Budget Report", together with a number of press releases filling out the details of my proposals, will be available from the Vote Office as soon as I have sat down.

ECONOMIC SITUATION AND PROSPECTS

I refer first to international developments. The past year has brought recession to a number of major industrial countries including the United States, Canada and Australia. Growth in Germany has been sustained by reunification; but elsewhere in Europe, activity has slowed and industrial production has fallen in recent months in Spain, Italy and France. In five of the seven leading industrial nations, industrial output is now lower than it was a year ago.

The basic cause is the same everywhere: very rapid growth in the industrialised world during the 1980s led to the re-emergence of inflationary pressures. A period of slower growth was needed to stop inflation taking hold again.

In the autumn, the slowdown was magnified by the Gulf crisis. Business and consumer confidence were badly dented, first, by the uncertainties and the sharp rise in oil prices that followed the invasion of Kuwait, and then the prospect of war. Travel and tourism were especially hard-hit.

Mercifully, the war was brief and the outcome successful. Confidence is recovering and that will strengthen the economic upturn when the time comes; and the fall in oil prices has already improved the outlook for inflation.

So although 1991 as a whole will show little growth in the seven major economies—a ½ per cent. increase in industrial production compared to 5¾ per cent. in 1988—the slowdown is unlikely to last long. Inflation is already moderating in those countries that are in recession, and activity should start to recover later this year in north America, helped by continued expansion in Germany and Japan.

In the United Kingdom, the recession came after eight years of growth averaging 3 per cent. a year. This sustained growth bred confidence and that in turn led to a quite unprecedented rise in borrowing. Personal borrowing increased by nearly 40 per cent. in 1988 alone, to reach £54 billion—and a new record for the ratio of debt to income. This produced a sharp drop in the personal saving ratio, which coincided with a massive boom in investment by companies.

In itself, the rise of investment—nearly 80 per cent. between 1981 and 1989—was welcome, but the economy could not go on expanding at that rate. Some firms and individuals became over-extended and we saw a deterioration in the current account and a wholly unwelcome rise in inflation.

It is easy, with the benefit of hindsight, to say that policy should have been tighter; and, once the problem became clear, policy was indeed tightened. We ran a large budget surplus. Interest rates were raised, and they had to stay high until there were unmistakable signs that excess demand pressure had been removed. That took longer than we—or outside commentators—expected, and the delay meant that the adjustment, when it came, was all the sharper.

Since the middle of last year, individuals and companies have been taking steps to reduce their borrowing. Consumer spending has fallen back, and the saving ratio has risen sharply to 10·8 per cent. Firms have found it hard going. Profits have weakened, caught in the pincer of low turnover and rising costs, and the burden of debt taken on in the late 1980s has proved a heavy one.

It is not surprising, therefore, that business investment has fallen from the heights of 1989 and early 1990. Stocks are now being reduced, and companies are making strenuous efforts to cut costs. That has led to a sharp increase in unemployment during recent months, although there are welcome signs that firms are continuing to invest in skills and training. I expect output in 1991 as a whole to be about 2 per cent. less than in 1990. Much of that fall, of course, has already happened. It is largely behind us and, as I shall be explaining in a moment, the resumption of growth should not be long delayed.

The process of retrenchment has been painful, as it always is, but it has been necessary and is now producing results. The current account deficit has improved sharply—especially the balance on manufactures—even though world trade has been weak. Imports have fallen. while exports in some sectors, notably cars, have continued to grow strongly—testimony to the fact that industry is immeasurably better placed today than it was 10 years ago.

No one can doubt that inflation is on the way down. There has already been a fall of 2 percentage points since the peak last October, and there is widespread agreement that the fall in inflation will continue through 1991 and into 1992.

The prospects are now better than they appeared at the time of the autumn statement. The February survey by the Confederation of British Industry showed that the balance of firms expecting to increase prices was at its lowest level ever. The forecast published today, taking account of the effect of the Budget measures, is for inflation to fall to an average of 4 per cent. in the last quarter of this year and below 4 per cent. in the first half of 1992. The prospect, therefore, is that we will narrow the inflation gap with Europe remarkably quickly.

In the mid-1980s, we did get inflation briefly below 4 per cent., and we saw the advantages that followed. We are about to do so again, and again we will reap the benefits. Lower inflation, and the lower interest rates that go with it, will be a powerful force for recovery.

One of the lessons that I have learnt from years of grappling with economic statistics is that it is difficult to be certain about the past, let alone about the future. It is always especially difficult to predict the timing of turning points in the economy. However, there are good reasons to expect that the recovery will begin around the middle of this year, although initially it may be slow.

As we found 10 years ago, confidence revives as inflation comes down. This time, the ending of the Gulf war will give the revival an added boost. Just as falling consumer spending contributed to the onset of recession, so returning consumer confidence is likely to lead the recovery. At the same time, the reduction of stocks is likely to slow and the United Kingdom will benefit from the upturn in the United States and elsewhere in the world.

As a result, I expect output to stabilise in the next few months and then to increase by about 2 per cent. between the first half of this year and the first half of 1992. Looking further ahead, our projections show growth of about 3 per cent. a year as the economy recovers further.

The easing of demand pressures has already brought a marked improvement in our current account. As the House will have noticed, there can be lags not just between policies and their effects, but between the effects in the real world and their appearance in the official statistics. As a result of the recent revisions of the figures for invisible imports and exports, the current account deficit for last

year is now estimated at under £13 billion, £2 billion less than forecast at the time of last year's Budget. This year, I expect the deficit to be halved to £6 billion, about 1 per cent. of national income.

Regrettably, unemployment is likely to go on rising for a while yet, even after the recovery has started. How far and how fast it rises will depend, in part, on the speed with which pay settlements come down—and come down they must, eventually, to the levels prevailing in other ERM countries. There is no escape route through devaluation, and firms know this.

Fortunately, a sharp fall in inflation is in prospect, and the reforms that we have introduced over the past decade have led to more pay flexibility. Some firms have already deferred pay settlements or agreed pay pauses. The more firms that follow their lead, the sooner we can reverse the trend in unemployment, and start creating jobs again.

To sum up, the prospect for the year ahead is for an end to the recession, growth of about 2 per cent. in the 12 months to the first half of 1992, and inflation below 4 per cent. This does not seem to me an umpromising outlook.

For the longer term, there is every reason to be optimistic about the United Kingdom in the 1990s. Recessions are always painful, but they are an inescapable feature of market economies—and they are temporary. Longer-term growth depends on having a thriving competitive private sector. That we now have, thanks to the reforms of the past 10 years.

If I may confess it, I do not believe in miracles, but I do believe that the right policies, courageously and consistently applied year by year, can produce a transformation in an economy, and that is what happened in the 1980s.

So now we can build on real achievements: a record number of new businesses, faster growth in manufacturing productivity than in any major industrialised country, and faster growth in investment than in any of those countries except Japan. These achievements have helped us over the past seven years to maintain our share of world trade, after 30 years of decline. They made the 1980s the first decade since the war when the United Kingdom grew faster than Germany and France.

MONETARY POLICY

There is one proviso—and it is a crucial one. We must get inflation down, and this time we must keep it down. The overriding lesson of the past few years is that the battle against inflation is never won. It is fatally easy to miss the warning signs, and hard decisions have few friends.

The costs of even a temporary reverse are high. Squeezing out inflation means high interest rates, frustrated hopes, bankruptcies and lost jobs.

But the costs of living with inflation are even higher—as those who remember the 1970s know only too well. Inflation makes our industry uncompetitive; it destroys savings; it creates uncertainty and strife; and a high rate of inflation can quickly get out of control. High rates of inflation are never stable.

Frankly, after the experience of recent years, it surprises me how many people are urging me to let up on inflation. It may not seem much of a threat for the next six or 12 months, but I am concerned with the year after that and with the rest of the decade.

The Government's decision to join the exchange rate mechanism last October provides a more secure


framework for combating inflation in the future. That is its real significance. Linking sterling to other currencies with a proven track record of low inflation will be an added discipline on monetary policy.

We committed ourselves to that discipline after lengthy debate, and our decision was widely supported on both sides of the House, and in the country at large. The time has now come to apply ourselves wholeheartedly to the task of making our membership a success.

So far, it has been. Sterling has traded comfortably within its band during a difficult period. The sterling index is much where it was just before ERM entry, and our patient approach has meant that recent reductions in interest rates have been well received by the markets. They have recognised that they are consistent with our ERM obligations, as well as fully justified by the domestic economy.

Our entry into the ERM means that I have had to reassess the role of domestic indicators in guiding monetary policy. It should go without saying that interest rates will be set to honour our commitment to stay within the ERM band, but there is still a most important role for domestic monetary targets. All the major countries within the ERM take the same view.

Over the past year, M0—the narrow measure of money—has continued to provide timely evidence of monetary developments. Its annual rate of growth has been on a downward trend since last May. Since August, it has been within its target range of 1 to 5 per cent. For the year ahead, I propose to set a new, slightly lower target range of 0 to 4 per cent. That is consistent with my determination to exert further downward pressure on inflation. I shall also continue to watch closely other indicators of monetary conditions, especially M4—the measure of broad money—and asset prices.

There should be no sustained conflict between domestic monetary indicators and our ERM obligations. By far the best way of minimising the risk that conflicts will arise in the future is to build up credibility within the ERM. The policies that are necessary to defeat inflation and to sustain the exchange rate are the same.

For the time being, I have no plans to move to a narrow ERM band. That remains, of course, our longer-term intention, but the timing of the move must depend on the progress we make in reducing inflation.

PUBLIC FINANCE AND FISCAL POLICY

I come now to the public sector finances.

Over the 1980s, my predecessors transformed our public finances and made them the envy of fellow Finance Ministers throughout the world. They first reduced and then eliminated our budget deficit, and in the last three years they repaid £26 billion of debt. The ratio of public sector debt to gross domestic product has been reduced from 50 per cent. in 1979 to under 30 per cent. now, to the benefit of this and future generations.

I am not going to fritter that legacy away. The firm control of public expenditure remains at the centre of our strategy. I will continue to aim for budget balance in the medium term. It is a simple rule, which is well understood and requires the Government to finance their spending honestly.

Our entry into the ERM does not alter the requirement for fiscal policy to buttress monetary policy and play its part in curbing inflation; so sound public finances will remain central to our strategy for the 1990s.

However, it is one of the more reliable laws of economics—not that there are so many—that the budget balance varies markedly over the economic cycle. When activity is growing strongly, tax revenues rise relative to income, and lower unemployment brings lower social security payments. We saw this in operation in the late 1980s when we ran large budget surpluses.

Those forces go into reverse when the economy slows down. That is why the Budget surplus has shrunk over the past two years, and why we are now likely to see the temporary re-emergence of a public sector borrowing requirement.

Those cyclical swings in the budget balance can play a useful role in offsetting the swings in private sector borrowing, and in stabilising the economy. They come about automatically, without the need for difficult judgments about the state of the economy. It is entirely consistent with the medium-term approach that I have already outlined to tolerate those swings in the fiscal position, but I am not persuaded of the case for going beyond that.

In 1990–91, the Government's finances have been affected both by the onset of the recession and by the Gulf war. However, as a result of the assistance we have received from our allies, the net effect of the war on the PSBR has not been as great as we feared. The outturn on the public expenditure planning total is expected to be a little lower than we forecast in the autumn statement. Overall, despite the war, I expect to achieve a further debt repayment this year of approaching £1 billion.

For the year ahead, I judge that a deficit of £8 billion can fairly reflect the strength of cyclical influences. For the same reason, I think it will be right to tolerate a somewhat larger deficit in 1992–93, for it takes time for the effects of lower activity to feed through fully on to revenue. The most notable is corporation tax, which is both highly sensitive to the economic cycle and paid in arrears.

Those deficits will disappear once output has returned to normal levels—just as the surpluses of the late 1980s did. Prudence dictates that I base my fiscal plans on a gradual recovery in output to its long-term trend. This implies a correspondingly gradual return to budget balance, but in practice the speed with which this happens will depend on the exact course of the upturn.

To summarise: for the year ahead, I am budgeting for a PSBR of £8 billion, 1¼ per cent. of GDP, and I expect a somewhat larger deficit in the following year. These deficits reflect the effect of lower activity on the public finances and are fully consistent with the aim of a balanced budget over the economic cycle.

In order to hold to this prudent fiscal stance, my Budget today will have a broadly neutral effect in the coming year, but will produce a modest increase in revenue in 1992–93.

BUSINESS TAXATION

I now turn to my tax proposals. In preparing this part of my speech I have been guided by great Finance Ministers of the past—first, by Gladstone, whose advice on delivering tax proposals to the House of Commons was:
Get up your figures thoroughly … and then give them out as if the whole House was interested".

Secondly, I have perhaps been influenced by Colbert, the French Finance Minister, who said:
The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing".

In framing my tax proposals, I have also sought to address a number of the concerns which have been put to me and to carry foward the process of tax reform initiated by my predecessors. Above all, I have produced a Budget for business. I therefore begin with business taxation.

In this country, there are 50,000 large companies paying the main rate of corporation tax, nearly 1 million other companies and 3 million unincorporated businesses. many of them very small, employing a handful of people at most. We should never forget those firms. My measures are designed to benefit businesses in each of those categories.

I have been particularly concerned about businesses which are experiencing cash flow problems, often made worse by late-paying customers. I shall therefore be announcing measures which should give immediate help to businesses' liquidity.

My first proposals concern the value added tax regime. For 18 years, ever since VAT was introduced, the rule has been that businesses become liable for VAT when they send out bills, not when they are paid, so some traders end up paying VAT even though their customers never pay them. In his Budget last year, my right hon. Friend the Prime Minister introduced an entirely new system for giving traders relief on bad debts. That comes into effect on 1 April and extends relief to all bad debts which are at least two years old.

Many business organisations have complained to me that that waiting period is too long. I now propose to reduce it from two years to one. This will enable businesses to claim relief next year on the bad debts that they incurred in 1990–91 and 1989–90. The new scheme will boost businesses' cash flow next year by some £340 million.

Actually, for the smallest firms, the problem of reclaiming VAT on bad debts need not arise in the first place because they can use the cash accounting scheme. That allows smaller firms to pay no VAT at all until they receive payment from their customers. Well over 100,000 traders are already using the scheme, but we estimate that a further 300,000 could do so. Customs and Excise will therefore be taking steps to publicise the cash accounting scheme more widely.

There is another aspect of the VAT regime which I know causes concern—the operation of the serious misdeclaration penalty, which came into effect last April. There have been widespread complaints that the automatic penalty that it imposes—30 per cent. of the tax wrongly declared—is too severe and unfair to those who make minor mistakes.

I accept that the penalty in its current form is an unnecessarily blunt instrument. We will therefore undertake a thorough review so that the SMP system can be reformed in the 1992 Finance Bill. I have also asked Customs to make some immediate changes to the rules,

giving traders more time to put mistakes right themselves without incurring a penalty. I do not wish to pre-empt the review but, while it takes place, I am reducing the rate of penalty from 30 per cent. to 20 per cent.

Accounting for VAT can be an onerous duty for small traders. When VAT was introduced, we exempted firms with the lowest turnovers from registration. Since then, the registration threshold has been indexed.

European Community constraints have meant that, in the past, we have not been able to increase the threshold by more than the rate of inflation. At the end of last year, however, we pressed the case with the Commission to increase the VAT threshold. It responded very positively, and I therefore feel able to go far beyond indexation and to increase the turnover limit for registration by no less than 40 per cent. to £35,000, taking it to its highest level in real terms since the introduction of VAT in 1973. This will benefit up to 150,000 traders. The cost of raising this threshold will be £25 million in the first year, rising to £40 million in 1993–94.

I have two further deregulatory measures to announce, which will benefit very small businesses. At present, all employers have to pay over the pay-as-you-earn and national insurance contributions that they collect from their employees 14 days after the end of each month, but the burden of collection falls unevenly. Large firms are amply compensated for the trouble and cost of collecting the tax by the benefits of holding the money for this period, but small employers are not.

I have a proposal that will reduce the burden on some 700,000 smaller employers. From May onwards, employers making PAYE and national insurance payments of less than £400 each month will pay quarterly, not monthly. This will reduce the administrative burden on firms and help their cash flow, at a one-off cost to the Exchequer of £210 million.

I have one further measure to announce to help very small businesses account for tax. Last year, for the first time, businesses with a turnover below £10,000 were allowed to send the Inland Revenue a simple three-line statement instead of detailed business accounts. This is an important deregulatory measure which cuts out time-consuming paper work for up to 1 million people. From April 1992, I propose to raise the £10,000 limit, so as to allow up to ½ million more people to benefit.

There is a case for making a more radical simplification of the taxation of the self-employed. The Inland Revenue will shortly be publishing a consultative document containing our proposals.

I am concerned that the system of income tax appeals can sometimes operate unfairly, in particular because there is no provision for the award of costs. My noble and learned Friend the Lord Chancellor and I want to deal with criticisms by the Council on Tribunals about the absence of proper rules for hearing tax appeals. We shall be publishing a consultative paper which will include proposals about the award of costs where either party has acted unreasonably.

I have one proposal to limit the impact of capital gains tax on entrepreneurs and on our growing venture capital industry. I have in mind particularly those who may give up safe managerial positions to set out on the risky road of running their own business. For those people, the possibility of a large capital gains tax charge can be a deterrent. I have considered whether it would be suitable


and sensible to introduce specific rules for venture capital, but I have concluded that that would be extremely difficult.

However, one way in which we can help business men and women to reap the rewards of their efforts is to improve the relief available to them when they retire and have to realise the asset that they have created. That is why I propose to reduce the qualifying age for capital gains tax retirement relief from 60 to 55, and to raise the limits on it. From today, the first £150,000 of capital gains and half of the next £450,000 will be exempt from capital gains tax. This will be a powerful incentive to entrepreneurs to start new businesses.

I have one other important change relating to capital gains tax on small businesses. Under existing law, only companies can offset their trading losses against their capital gains. I propose to give unincorporated businesses similar treatment. This will help small businesses if they wish to sell off assets to help themselves through a difficult period.

In addition to the measures that I have announced for small business, I wish to propose some changes to corporation tax. In his Budget last year, my right hon. Friend the Prime Minister raised the profit limits that govern the corporation tax rates paid by smaller companies. He increased the ceiling below which single companies pay corporation tax at 25 per cent. from £150,000 to £200,000, and the upper limit above which they pay the full rate from £750,000 to £1 million.

I propose this year to raise the limits again by a quarter. That means a total increase of 150 per cent. in three years. As a result, companies will need to be earning profits of more than £250,000 before they are liable to pay more than 25 per cent. Companies will not have to pay the full rate of corporation tax until their profits reach £1,250,000 a year. This will benefit 30,000 companies.

In 1984, my right hon. Friend the Member for Blaby made a radical reform of corporation tax. In his time as Chancellor, the main rate of corporation tax was reduced in stages from 52 per cent. to 35 per cent., thus boosting companies' post-tax profits, encouraging profitable investment at home and overseas and increasing the incentive for overseas firms to invest in Britain.

I believe that the philosophy behind his reforms—to widen the tax base, but to reduce the rates—was the right one. It is a policy that has been welcomed by industry. It allows business men, and not Governments, to decide how much to invest and in what to invest. It set the pattern for similar reforms in many countries throughout the world and ushered in an increase in investment of 50 per cent. between 1984 and 1990.

I propose today to take a further step in that direction. Corporation tax rates have remained unchanged at 35 per cent. since 1986, but since then the basic rate of income tax has been reduced from 30p to 25p and the top rate from 60p to 40p. I believe that the time has come to cut the main rate of corporation tax again.

However, I am also aware that cutting the rate of corporation tax only helps companies that are making a profit. Many businesses that have prospered in recent years have moved into loss this year. A cut in corporation tax does not help them and nor, in some cases, do existing arrangements for the carry-back of losses.

I am taking two measures to improve company cash flow. I am cutting by 1 per cent. to 34 per cent. the main rate of corporation tax, applied retrospectively to profits

earned in the financial year 1990. This will give an immediate boost to the cash flow of companies that were profitable in the year just ending. It will benefit not only companies paying at the main rate, but the 30,000 other companies with profits between the lower and upper profits limits.

To help profitable companies that have just moved into loss, I propose to extend the carry-back period for trading losses from one year to three. That means that more companies making losses will qualify for tax rebates in 1992–93—valued at £250 million—which will help them to carry on through this difficult period.

My main concern in this Budget is to encourage profitable firms to go on investing in Britain's future. The best way in which to do that is to increase still further the post-tax return on successful investment projects. For that reason, I am cutting the main rate of corporation tax on profits earned in the 1991 financial year by two percentage points, to 33 per cent.

The two reductions in the main rate, from 35 to 33 per cent, will together cost £380 million in 1991–92 and £830 million in 1992–93. They will give us the lowest rate among our major competitors—lower than that of the United States, and the lowest in the European Community.

SUPPLY SIDE

The 1980s were years of remarkable progress in our economy, but even more striking was the change in attitudes. The crucial importance of the market is now widely accepted in this country, and even more widely accepted in the House. There is a much greater acknowledgement of the fact that market forces and competition play a vital part in shaping our economy. That remarkable change in ideas and attitudes is the lasting legacy and achievement of my right hon. Friend the Member for Finchley (Mrs. Thatcher).

My right hon. Friend recognised that the key to a better performance by the economy in the long term lay in improving the supply side; and, over the past decade, that has been the aim of our tax policy, trade union and labour market reform, our competition policy, deregulation and privatisation. But, if the United Kingdom economy is to perform to its full potential, we still need a more flexible labour market and a better-skilled work force. I have a number of further measures to announce to that end.

If wages are inflexible, the burden of recession falls disproportionately on jobs: it is the only way for employers to cut costs. There is a considerable prize if we can get pay to take some of the strain. In 1987, we introduced a new tax relief to get profit-related pay off the ground. There are now about 1,250 such schemes in total, involving nearly 300,000 employees; but there can and should be many more, so I propose to make the scheme more attractive.

At present, half an employee's profit-related pay is tax-free. From 1 April, PRP will be free of all tax up to the present limits. It is worth up to a full £1,000 to a basic-rate taxpayer. For some, that could be worth as much as 6p off the income tax rate.

There is another way in which employees can and should enjoy a stake in the companies for which they work—through becoming shareholders in them. Employee share schemes have made a great deal of progress over the past 10 years. By the end of March last year, 2¼ million employees had benefited from shares or options worth


more than £6·5 billion. Too often, however, employee share schemes have been directed solely at highly paid company executives. I believe strongly that valuable benefits of this kind should be extended to the whole work force.

I have given serious consideration to limiting executive share schemes solely to companies with all-employee schemes in place, but I have instead decided to rely on the carrot rather than the stick. From January next year, the price of shares under executive options may be set at a modest discount of up to 15 per cent. of the shares' market value if—but only if the company has an all-employee share scheme.

I also propose to increase substantially the limits on individual participation in approved all-employee share schemes, and to allow companies tax relief on the costs that they incur in setting up approved employee share schemes and statutory employee share ownership plans.

Another aspect of the supply side that needs improvement is training. A well-trained labour force is an important element in any firm's success. Employers know that and are acting on it. The 1990 labour force survey shows an 85 per cent. increase in the number of employees receiving job-related training since 1984. Despite the recession, the last CBI trends survey reported that over 75 per cent. of employers expected to spend at least as much on training in the next 12 months as they had last year and 29 per cent. expected to spend even more.

However, more and more individuals are also choosing to take responsibility for their own training. Employers can get relief on the training they provide as a normal business expense, yet at present the tax system generally gives no relief to an individual who decides to pay for training to improve his or her skills.

That cannot be right. If we want a better trained, more flexible work force, we should encourage people who want to help themselves. I propose to do just that. I am introducing a tax relief for the fees paid by an individual for training towards most national vocational qualifications and their Scottish equivalents. From April 1992, basic rate tax will be deducted automatically from the fees for qualifying courses, so non-taxpayers will benefit as well as taxpayers. Among those who stand to gain are women wishing to get back to work after having children.

OTHER BUSINESS MEASURES

Many hon. Members have pressed the case for helping two specific industries this year: shipping and films. While I sympathise with their aims, I have to say that there is a limit to the extent to which we can—or should—bend the tax regime to meet the special needs of any particular industry.

The Gulf hostilities have reminded us of the important contribution which our Merchant Navy can make to our defence. I recognise that there is a strategic case for measures to encourage shipping companies to draw their crews from seamen in the United Kingdom, who would be willing and able to serve in time of war. Towards this end, I propose a further relaxation of the rules giving tax relief to seafarers working mainly overseas. This will mean that more seafarers will be exempt from United Kingdom tax on their overseas earnings.

The film industry makes an important contribution to entertainment and culture in this country. The industry has put forward a number of proposals, but having studied

these carefully, I am afraid I cannot accept them. However, I remain sympathetic, and if it has any alternative proposals that it wishes to put to me over the coming year, I will very happily consider them.

I know that the tax treatment of foreign exchange gains and losses causes difficulties for many businesses. This is one of the most complex and intractable areas of the tax code. Our 1989 consultative document elicited a valuable response but no consensus on the way forward. I am publishing today a further document setting out my specific proposals for reform, which I trust will bring greater rationality to this very important and complex area of the tax system.

I have also to correct one defect in the law affecting building societies. In a recent judgment, the House of Lords concluded that regulations covering the 1986 composite rate transitional provisions for building societies were technically invalid. If I were to take no action about this, there would be a windfall gain to building societies—not their depositors—of £250 million, distributed arbitrarily according to their accounting dates in 1985–86. I have therefore decided to include legislation in the Finance Bill to establish, as the Government and Parliament intended, that interest and dividends paid by societies in these transitional periods may be taxed at 1985–86 rates.

TRUSTS

I turn now to trusts. In 1988, as Financial Secretary, I announced a review of their tax treatment. Today, I am publishing a consultative document on possible changes to the income tax and capital gains tax regime of United Kingdom resident trusts. My proposals include an alternative structure of tax rates, which would bring the treatment of trusts more into line with the treatment of individuals. They would also help to streamline the administration of trusts, saving work for trustees and their advisers.

We have also been reviewing the tax treatment of non-resident trusts. This raises an important issue of principle. In recent years, the use of non-resident trusts as a means of avoiding capital gains tax has increased. I do not think that it is right for a relatively small number of wealthy people to shift very large assets into offshore trusts simply in order to avoid United Kingdom tax. Such people have already benefited from the reductions in the higher rate of income tax. I therefore propose to introduce measures to counter this tax avoidance and to prevent a revenue loss of up to £100 million in a full year.

CHARITIES

I turn now to charities. While people's real incomes have risen by over a third since 1979, charitable giving has more than doubled, partly as a result of the measures taken by my predecessors to encourage more giving. Tax reliefs for charities are now worth at least £800 million a year. Today I have some modest improvements to announce to the tax regime for charities.

I have two measures that should boost giving by businesses. The first is a new relief from income and corporation tax to encourage business gifts of equipment to schools and to other educational establishments.

The second concerns the gift aid scheme introduced last year. This allows companies and individuals to get tax


relief on cash donations to charities up to a limit of £5 million a year, under the gift aid scheme. Company groups have found that the division of this upper limit between them prevents them from donating as much as they would like. To overcome this problem, I propose to abolish the limit altogether from today. In recent years, there has been a remarkable increase in corporate donations to charities. I hope that this further measure will encourage companies to give even more.

I also propose to adjust some existing VAT reliefs for charities and to ease the conditions for the relief from car tax for vehicles leased to disabled people.

SPORT AND THE ARTS

I now come to a proposal to benefit both sport and the arts. Last year, my right hon. Friend the Prime Minster reduced pool betting duty, on the condition that the benefit was passed to the Football Trust. Following the success of that measure, a proposal has been put to me by one of the pools promoters for a new foundation for both sport and the arts.

League football benefited from last year's Budget measure, and racing benefits from the horse racing betting levy. This new foundation is intended to provide assistance to other sports and to the arts. It will be financed by contributions collected by the pools promoters along with the weekly pools betting stakes, and should raise some £40 million a year.

On the understanding that all the main pools companies agree to participate and that the full amount would be passed on to a new trust established on satisfactory terms, I would be willing to reduce pool betting duty a final time—from 40 per cent. to 37½ per cent. These arrangements would be subject to a review in four years' time. They should make a further £20 million a year available—giving £60 million a year in total—to the foundation in order to support both sport and the arts.

EXCISE DUTIES

I now come to excise duties. First, I propose to raise the duties on alcoholic drinks to maintain their real value. That means that the duties will rise from 6 o'clock tonight by 9·3 per cent.—in line with the increase in the retail prices index in the year to December 1990. That will put about 2p on a pint of beer, 9p on a bottle of wine and around 56p on a bottle of spirits.

I will also be legislating to change the basis on which beer is taxed. The existing system of taxing the so-called "worts" was introduced by my predecessor, Mr. Gladstone. It will now be replaced by one in which the end product, the beer itself, is taxed. The new system will relate the duty more closely to the alcoholic strength of the beer—with a higher tax levied on strong lagers than on low alcohol beers.

I propose increasing all tobacco duties by 15 per cent.—well above the rate of inflation. This will add about 16p to the price of a packet of 20 king size cigarettes, and, I regret to say, around 8p to a packet of small cigars.

There are strong health arguments for a big duty increase on tobacco. In recent years, the duty has fallen in real terms, and cigarette consumption, having declined in the early 1980s, has since begun to turn up again. Raising the duty will help to counter this unwelcome trend.

The motor car imposes large costs on others in the form of pollution and congestion. I have decided therefore to increase the duties on petrol and DERV by 15 per cent, giving the private motorist a strong incentive to choose more fuel-efficient vehicles, and ensuring that those who pollute most, pay most. This is fully in line with the policy set out last year in the Government's White Paper on the environment.

A litre of leaded petrol will rise by nearly 4p, a litre of unleaded by about 3p and a litre of diesel by just over 3p. The tax differential between leaded and unleaded will increase, giving a further boost to the take-up of unleaded. I propose to freeze vehicle excise duty for private cars and light vehicles at £100, for the sixth year running, and also to freeze VED for all heavy goods vehicles.

BENEFITS IN KIND

Many motorists do not own their own cars but drive those provided by their employers. The scales for taxing the private use of company cars have been substantially increased in recent Budgets, but many employers continue to pay their employees in cars rather than in money. I propose to increase the car scales again this year by 20 per cent. This increase will yield £190 million in 1991–92and £250 million in 1992–93.

If people are paid in kind, there is no reason why they should be taxed more lightly than people paid in cash, yet our present system also gives employers an incentive to provide employees with cars rather than cash. Under our present arrangements, they avoid making any contribution to the national insurance fund on the benefit that the employee receives from private use of a car.

I propose that company cars and fuel should now become liable for national insurance contributions, assessed according to the scale charges used for taxation. My right hon. Friend the Secretary of State for Social Security will introduce a Bill to that end. Employers will pay at the main rate, but there will be no change for employees.

Employers' national insurance contributions on cars and fuel will yield an extra £610 million a year of contributions. This will reduce an anomaly in the national insurance contributions system, making it more neutral between different kinds of payment, and will widen the national insurance contributions base.

These new arrangements will take effect from April, but contributions will be collected annually in arrears, so employers will not be asked to pay their first contribution until June 1992. They are already familiar with the scale charges used for the tax so they should be able to make the necessary calculations with the minimum of extra work. They are already familiar with the scale charges.

I turn now to what I regard as one of the greatest scourges of modern life. I refer to the mobile telephone. I propose to bring the benefit of car phones into income tax and to simplify the tax treatment of mobile phones by introducing a standard charge on the private use of such phones provided by an employer. Tax will be paid of £200 for each phone for 1991–92. I hope that, as a result of this measure, restaurants will be quieter and the roads will be safer.

SAVING

I have already drawn attention to the imbalance between savings and investment and its effects in the late 1980s. As companies found more and more opportunities to invest, we needed more savings; but instead, the saving ratio fell. In successive Budgets, my predecessors introduced new tax incentives to save. Many forms of saving now enjoy a highly privileged tax position.

Last year in particular, my right hon. Friend the Prime Minister announced a new scheme, the tax-exempt special savings account. TESSA has proved a spectacular success since it arrived on the savings scene nearly three months ago, and has encouraged the savings habit among ordinary taxpayers. Already, over 1·illion people have opened accounts.

My right hon. Friend also announced in his Budget last year the abolition of composite rate tax. From 6 April, non-taxpayers will no longer have to pay tax on their accounts with banks and building societies. These are far-reaching reforms, which need time to settle down and take effect, so this is not the year to disturb the regime that we have just put in place, or to risk causing confusion with further schemes. My main concern has been to consolidate the system that we already have, although I have some modest changes to announce.

I propose to raise the capital gains annual exempt amount to £5,500 and the inheritance tax threshold to £140,000 this year in line with inflation.

National Savings continue to play an important role, particularly for small savers. This summer, I propose to introduce a new National Savings children's bond for children under 16. There will also be a new issue of fixed-interest savings certificates, with a maximum investment of £5,000 compared with £1,000 on the last issue. Other changes to National Savings products will be set out in a press release issued today.

I am also removing the restrictions on friendly societies writing tax-exempt life insurance policies for children, and increasing the limit on premiums for their tax-exempt policies generally from £150 to £200.

Personal equity plans remain an important means of promoting direct share ownership. Since their introduction in 1987, about 1·2 million PEPs have been taken out, and over £3 billion has been invested. I have some further changes to announce.

First, I in tend to allow investment in European Community, as well as United Kingdom, shares both for individuals and for unit and investment trusts. Second, to promote the development of single-company PEPs, I propose to allow investors to put up to £3,000 a year in a single-company PEP, as well as up to £6,000 a year, as now, in a general plan. This will allow total investments of £9,000 a year.

While single-company PEPs are available to any investor, I believe that they provide a natural home for shares acquired under employee share schemes. I therefore propose to allow shares acquired under approved all-employee share schemes to be transferred directly into the company PEP, with no charge to capital gains tax.

Employee share schemes and PEPs have encouraged individuals to become shareholders, but many people have bought their first shares in big offers, mainly privatisations. The first of these to catch the public's imagination

was British Telecom. The Government currently still own some 48 per cent. of the shares, and I can announce today that I intend to sell part of this holding in the coming year.

Privatisations have been a great success. The next step is to encourage people to invest in shares more generally. One problem is that, to the small investor, the stock market can seem remote, intimidating and somewhat expensive. The development of a genuine retail market for shares in high streets up and down the country would be highly desirable.

To give this the boost it deserves, the Government are considering a change in the way in which they market privatisations. For future large flotations, I am today inviting proposals from the private sector for arrangements to distribute shares directly to the public through high street retail networks.

I hope that there will be proposals both from financial institutions—banks or building societies—and from companies outside the financial sector. If satisfactory proposals can be developed in time, I will consider using such a high-street network in the sale of British Telecom shares.

Such a high street network could be used for primary issues, not only by the Government but by private sector companies and, in the longer term, it could provide a cheap and accessible way for individuals to buy and sell in the secondary market.

MORTGAGE INTEREST RELIEF

The measures that I have just announced will encourage people to save, but there is another side to the story, for the fall in the saving ratio at the end of the 1980s was a result not of a fall in gross savings so much as an increase in borrowing, particularly mortgage borrowing.

In part, that reflected the remarkable increase in home ownership over the last decade. That has been, and remains, a key objective of policy for the Government. A less desirable development, however, was the dramatic boom in house prices during the late 1980s, which fuelled borrowing and helped boost inflation. Many first-time buyers found prices rising much faster than their incomes. We need to do all we can to ensure that, when recovery comes, it is not accompanied by another bout of house price inflation, with the unwelcome consequences that that would have for inflation and interest rates.

I propose to leave the ceiling for mortgage interest relief unchanged at £30,000, but from 6 April 1991 I propose that, relief should be allowed only at the basic rate. That will yield £220 million in 1991–92 on the basis of current interest rates, and £420 million in 1992–93.

I recognise that some people have arranged their affairs on the assumption that higher rate relief will continue. Therefore, to reduce the amount of extra tax they have to pay, I propose to increase the starting point for higher rate tax from £20,700 to £23,700, £1,000 more than required to match inflation. That will keep the number of higher rate payers broadly stable and mean that a married man will not become liable to higher rate tax until his earnings rise to nearly £29,000.

My objective is to reduce the tax subsidy to borrowing without significantly increasing the average tax burden on higher rate taxpayers. Taking those changes with the changes to the personal allowances that I am about to


announce, the typical increase in liability for a higher rate taxpayer with a £30,000 mortgage will be only around £1 a week.

Of course, the main determinant of the cost of a mortgage is not tax relief, but interest rates. For a higher rate taxpayer with a £50,000 mortgage, the fall in the typical mortgage rate that has already taken place since last autumn fully offsets the change that I am making to mortgage interest relief.

INCOME TAXES

I now come to income tax. Income tax is never welcome, but paying tax unexpectedly is even less so. That is the position facing employees who were working in Kuwait and Iraq at the time the Gulf crisis began. They may now become liable to pay United Kingdom tax on their foreign earnings which they had expected to be exempt. I propose that employees who had intended to work in Kuwait or Iraq for a year or more but were forced to return home earlier by the crisis should not be taxed on their foreign earnings.

I have no changes to make to either the basic rate or the higher rate of income tax. Our objective remains to move towards a basic rate of 20p, but I cannot make further progress towards it this year. Our priority must be to reduce taxes on business.

I propose this year to uprate the personal allowance in line with inflation. It will rise by £290 to £3,295. The personal allowance for the over-65s will increase by £350 to £4,020, and for those aged 75 and over by £360 to £4,180. The married couple's allowances for the elderly will also be increased in line with inflation, from £2,145 and £2,185 to £2,355 and £2,395. The income limit for the allowances for the elderly will increase by £1,200 to £13,500.

However, I am not proposing to increase the married couple's allowance for couples under 65 or the allowances that are linked to it. They will stay at £1,720.

I know that there is a widespread view in the House and in the country that more should be done to help families with children. I propose to use the resources released by not increasing the married couple's allowance for that purpose.

There are some, I know, who advocate the reintroduction of child tax allowances. I have looked at that option carefully, but I am clear—especially following the introduction of independent taxation—that it would not be an effective way of channelling resources to those who need them. A better way of directing help straight into the pockets of mothers, whether they choose to work or not, is child benefit. It goes to all families—to the children of non-taxpayers as well as the children of taxpayers.

I therefore propose to increase child benefit from 7 October by £1 a week for the first eligible child in each family, and by 25p a week for other children. These rises come on top of the increase announced by my right hon. Friend the Secretary of State for Social Security last autumn, which will be paid from 8 April. This means that, in October this year, a benefit of £9·25 a week will be payable for the first child, and £7·50 for each subsequent child.

We will ensure that the increases benefit not only taxpayers but the very poorest families—those on income support and family credit. These increases will help 6·8 million families, and 12·3 million children. I should add

that the Government have decided that the new levels of child benefit will be uprated in line with inflation next April and in subsequent years.

CENTRAL AND LOCAL TAXATION

The measures that I have announced today maintain a responsible fiscal policy, while giving help to industry and families. They also include some important reforms to the tax system. However, my Budget would not be complete if it did not address one other issue, which has attracted a certain amount of attention recently.

My right hon. Friend the Secretary of State for the Environment will be annoucing very soon the conclusions of our review of local government. I do not propose to anticipate his statement, but there is one announcement I want to make today.

In January, we announced a £1 billion package to reduce the community charge for more than half of all charge payers. Since then, I have been considering whether the impact of local expenditure on the local taxpayer is too great for any system of local taxation to bear.

I have concluded that local taxes are being asked to bear too large a burden, and that the level of the community charge is still too high. However, if local taxes are to fall, and if the standard of local services is to be maintained, taxes elsewhere must rise.

I propose, therefore, to make a substantial switch from local taxation to central taxation. This will amount to about £4¼ billion in the coming financial year—1991–92—and will reduce the net yield of local taxation to about £7 billion. This large reduction in local taxation will take it to a level that the Government believe should be sustainable in the longer term.

We shall introduce a Bill in the next few days to authorise payments of extra grant to local authorities, and to ensure that community charge payers will reap the full benefit in reduced charges in the coming year—1991–92. The money will not be available to increase local authority spending. Domestic rate bills in Northern Ireland will be reduced as well.

The Bill will also ensure that charge payers do not have to start paying their charges until the new and lower charges have been introduced. Later today, my right hon. Friend the Lord President of the Council will make a statement about the arrangements for the Bill. The switch requires a substantial increase in central taxation. I have decided that this should be achieved by raising indirect taxes—that is to say, taxes on spending.

I am proposing, therefore, from 1 April to increase the standard rate of value added tax by two and a half percentage points to 17½ per cent. VAT is a broadly based tax which falls on consumers rather than producers. Since much consumer spending is zero-rated, it bears less heavily on poorer households than on the better-off, so raising VAT is not only an efficient but also a fair way to raise the necessary finance; and raising taxes on spending rather than taxes on income will be better for savings, and consistent with our strategy for tax reform, first set down by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) in his 1979 Budget.

Raising VAT will increase some prices, but the reduction in the community charge will more than offset that effect, so the switch will actually reduce the retail prices index. As a result of these changes, the community charges recently announced in England, Wales and Scotland will be cut by £140. On average, the headline


charge will be reduced from about £390 to about £250 in both England and Scotland, and from about £260 to about £120 in Wales, while the amounts people actually have to pay, after allowing for relief and benefits, will fall I o under £175 in Great Britain. The charge in Shetland will fall to under £1.

PERORATION

The measures I have announced are designed to meet the three main requirements of any Budget. First, they represent sound finance, and contribute to a firm counter-inflationary policy. My predecessors transformed public finances in the 1980s; my proposals will keep us on track to balance the budget over the 1990s. Secondly, they respond to the economic needs of the moment. I have cut taxes on business, both this year and next, to help it to weather the recession and take advantage of the upturn later in the year. Thirdly, they continue the reform of the tax system to improve the working of the economy in the longer term. In addition, in a year when resources are tight, I have been able to give additional help to families with children. Finally, I have made a decisive reduction in the burden of local taxation across the country, and cut community charges in the coming year by £140.

This Budget is good for business, good for families, good for charge payers and good for the country. I commend it to the House.

PROVISIONAL COLLECTION OF TAXES

Motion made, and Question,

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

(a) Spirits (motion No. 2);
(b) Beer (rate of duty) (motion No. 3);
(c) Wine and made-wine (motion No. 5);
(d) Cider (motion No. 6);
(e) Tobacco products (motion No. 7);
(f) Hydrocarbon oil (motion No. 8);
(g) Vehicles excise duty (rates) (motion No. 9);
(h) Vehicles excise duty (exemptions: 1) (motion No.10); and
(i) Value added tax (penalty for serious misdeclaration) (motion No. 15).—[ Mr. Norman Lamont]

put forthwith, pursuant to Standing Order No. 50 (Ways and Means Motions), and agreed to.

Budget Resolutions and Economic Situation

AMENDMENT OF THE LAW

Motion made, and Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting any supply;
(b) for refunding any amount of tax, otherwise than by virtue of goods or services supplied to one person being treated for the purposes of section 14(3) of the Value Added Tax Act 1983 as supplied to another person;
(c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(d) for relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Norman Lamont.]

[Relevant document: European Community document No. 4433/91 on the Annual Economic Report 1990–91.]

Mr. Neil Kinnock: As is customary and traditional, I begin by congratulating the Chancellor of the Exchequer on the way in which he delivered his Budget speech. My congratulations are even warmer than they would otherwise have been because he has provided us with what must be the biggest climb-down in modern political history. After two years of wasting £10 billion on the misery, injustice and inefficiency of the poll tax, we find the Government backing off that which was, but less than a year ago, their flagship. There will, however, be less rejoicing over the fact that the right hon. Gentleman proposes to collect more in VAT; despite his protestations, that is not a fair way to collect additional taxation. By definition, the tax is regressive—for people on average incomes and low incomes.—[HON. MEMBERS: "No, it is not."] Oh yes it is. It takes a disproportionate amount from those on average and lower incomes, and everybody knows it.
Not content with a debate over whether we were to have a head tax or a granny tax or a bedroom tax, the right hon. Gentleman introduces a system of raising taxation to pay for local government services which will tax even children's sweets. It is hard to imagine a tax with a broader scoop—and all to try to bail the Government out of the stupidity of the poll tax mess that they have created.
That is not to mention all the disasters that will be inflicted—this is not an overstatement—on the cash flow of local government as it tries to cope with an entirely different system of providing the revenue to pay for local services. We shall watch the system and examine it in close detail, and we shall be amazed if the Chancellor gets from the British public the response that he seeks. They hated the poll tax and they will hate this con just as much.
There are elements in the Budget that we have cause to welcome. As my right hon. Friends remarked during the speech, there will be dancing in the streets of Islwyn, Sparkbrook and Monklands, East in the wake of the imposition of taxes on mobile phones—which the Chancellor described as attacking what he called one of the greatest scourges of modern times. He must have a peculiar perspective; when he said that I imagined he was about to deal with all the iniquities of the poll tax.
Nevertheless, there is much agreement on, for instance, the assistance to be given to small businesses. We called last year for the VAT relief on bad debts of more than a year, and we give it all the warmer a welcome for that. Raising the VAT threshold to £35,000 for small businesses is also welcome. The Opposition have joined small businesses and many Conservative Members in urging that. The simplification and reduction of small firms' corporation tax liabilities are sensible.
The only problem with the other changes that the Chancellor proposes to make in the corporation tax of firms of a variety of sizes is that, although they certainly need relief because of the difficulties that they have experienced in recent years—it amounts to £380 million this year, says the Chancellor, and £800 million in future years—we must make the point that if the Chancellor had such resources they could have been better used on capital allowances which would in turn encourage the movement of more investment into manufacturing industry. That point will be the subject of further debate between the two sides of the House.
We warmly welcome the announced limitation of mortgage tax relief to the basic rate of income tax. That has been our policy for several years now, and the Chancellor—inadvertently, I am sure—has made our job much easier when we form the Government after the next general election.
By way of a final immediate response to the Budget I must mention the changes announced in respect of child benefit. Judging from the hype, I had thought that the right hon. Gentleman would perform another spectacular somersault in this area and that he would roll back the years of the former Prime Minister and previous Chancellors during which the value of child benefit was significantly reduced. I had expected from a family man some understanding of just how significant child benefit is to large numbers of families on average and below average incomes. Instead we are given the postponed payment of an extra £1 for the first child and 25p for other children. I wonder that the right hon. Gentleman had the gall to come and announce 25p. He must have some idea, even on his income, of the expenses involved in bringing up children. His failure to recognise what those expenses mean for working families and families without jobs shows a contempt for their interests.
To restore child benefit to its level when the Government froze it, the Government would have had to increase it by £2·30 for children other than the first child and by £1·30 for the first child. Their failure to do that shows that they are continuing their bias of 12 years' standing against people on modest incomes and in favour of the best-off people in the country.
This is the Chancellor's first Budget and it is also the first since Britain became an exchange rate mechanism economy. This Budget is presented just 21 months before the completion of the single market in the European Community. It is also being presented in a recession. Given those dominating factors, it was only reasonable to expect that the Chancellor would deal with them directly in the Budget. We expected him to face up squarely to the challenges posed by the conditions that our economy faces. He did not. Instead, he dodged; he gave us a short-term Budget—a tinkering Budget. It will not stop

the slump. It will not help to build strength for the future. It will do nothing to enhance the competitiveness of British industry.
As the completion of the single market draws nearer, we see in the economies of our competitors economic growth and investment performance that vastly exceed those of this country, under this Government. The Chancellor spoke of recession everywhere, but let us put that into perspective. In Italy, growth is running at 2·4 per cent. and investment at 4·1 per cent. In France, growth is at 2 per cent. and investment at 3 per cent. In Germany, growth is running at 4·8 per cent. and investment at 5 per cent. In Britain, after 12 years under this Government, growth is minus 2 per cent. and overall investment is minus 3·4 per cent. In a country that used to be the workshop of the world, manufacturing investment essential to any future success of our economy is falling by 15 per cent. year on year. Yesterday's figures on manufacturing output showed a fall of 8 per cent. this year.
The Chancellor should have made a statement of shame about such figures and such a performance. Nothing like that is occurring in any comparable economy. Other countries are building up their economies in the approach to 1992 whereas the Government are running down the British economy. The Budget will not help to get Britain back to the growth or investment levels of our competitors before the single market is completed.
Last week, the Prime Minister said that he wants Britain to be
where we belong, at the very heart of Europe".
It is a commendable aspiration, which is shared by many of us. The trouble is that, after these Tory years, we shall be not at the heart of Europe, where we belong, but at the tail of Europe, where the Government have put us. The Budget will not stop that occurring.
In the wake of the Budget, unemployment will continue to rise, firms will continue to close and businesses will continue to fail. The cut in interest rates that we expect today, before the end of the week or some time next week, should help to mitigate all the pressure of the slump. However, although the cut is necessary and welcome, it will not be enough to stop the recession spreading and deepening. The damage that the Government's policies have done to the economy, to industry and to services is so deep and wide that the effects of a slump made in Downing street will continue for a long time to come.
In Britain now, 3,000 jobs are being lost and a hundred businesses fail every day. But industries and firms that go out of production today are unlikely to reappear tomorrow. There is a permanent loss of industrial capacity. Since the second world war, Britain has been through that experience only once before—in the last Tory slump, less than 10 years ago.
The Chancellor said that recessions are always painful. Our only experience of recessions is under Governments whom he supports. It is no accident. The genuine worldwide slump in the wake of oil price rises in the mid-1970s hit every industrial country—indeed, every country. It is more than a coincidence that the only two other recessions that we have experienced since 1945 have been under Conservative Governments. The difference between the last recession and this one is that this time the Government's policies are even killing off the survivors. Companies that managed to pull through the last recession have been unable to beat this one, and enterprises formed and built since the last recession have been wiped out.
Firms of all sizes are burdened by debt, including so-called distress borrowing, which now runs at over £20 billion—some say as much as £25 billion. Companies are borrowing to survive, not for investment, development or expansion. Redundancy notices and bankruptcy lists are not confined to the so-called old or traditional industries, but have affected electronics and aerospace, machine tools and textiles, software, construction and engineering industries. Well-managed, progressive and forward-looking companies are going down. Unemployment is gripping the south and the midlands, just as it is going up, yet again, in Scotland, Wales and the north of England.
So many of the people who are victims of the recession were promised an economic miracle. The Government encouraged them to borrow and spend and told them that they were part of an "enterprise society". Those people testify daily to the fact that they have been deceived and betrayed by a Government for which many of them voted.
In his economic survey this afternoon—his Budget retrospective—the Chancellor hardly gave a word or a thought to those people or to their jobs, industries or futures. If he had made a n extensive reference to them and their difficulties, he would have had to say how deep the recession really was and where it came from. If he had done that, he would have had to condemn the ex-Chancellor, his right hon. Friend the Prime Minister.
That is not simply my judgment. An experienced commentator recently reported:
The Chancellor … is …tightly boxed in by factors not so much of his own making, but that of his predecessor—and his predecessor but one".
That was said by the right hon. Member for Chingford (Mr. Tebbit), who was reporting—and no doubt earning a few bob in the course of doing so—in the Daily Express. No one could describe him as unfavourable to the Prime Minister because he was among the first to say that the present Prime Minister was the most natural successor to the right hon. Member for Finchley (Mrs. Thatcher).
I suppose that the Chancellor, the Prime Minister and the rest of the Government would like to be remembered as the people who took on rising inflation and pushed it down, but there are two big blemishes in their record. First, they brought the inflation in the first place. Secondly, the very same policies that they used to squeeze demand and inflation are also the policies that are crushing firms, industries and jobs. If the Government want to claim credit for combating inflation, they must also take the blame for causing the slump. No one else deserves the blame.
The right hon. Member for Shropshire, North (Mr. Biffen) said two weeks ago:
After 12 years in office there are no Conservative alibis".
That is certainly true, but it is also true that, if the Government were to have more time in power, they would continue to do the same thing. They would eventually float the economy out of a slump simply by relying on a rise in credit-financed consumption, and would try to tackle the resulting inflationary pressures in the economy with high interest rates. They have no other policies for a recovery; as they have shown before. That would push up prices, debts and wage claims, push down investment and output and wipe out industrial capacity, yet again. They have done that not just once in the past decade, but twice. They have not changed their policies, and they have still not learnt.
Last night I watched the "Panorama" programme—I suspect that many other hon. Members also watched it—on the slump and the way in which it is spreading. I saw the Secretary of State for Trade and Industry say that he was certain that
industry is poised to respond to a growth in demand".
How can he say that? It did not happen last time. When the Government's policies wiped out 20 per cent. of Britain's manufacturing capacity in the early 1980s and then let credit rip in the mid-1980s, British industry could not respond to the rise in demand. The result was, as the Secretary of State for Trade and Industry should understand, that Britain had its first ever deficit in manufactured trade, a huge balance of trade deficit and then, of course, a gigantic balance of payments deficit—so big that it remains at the figure that the Chancellor gave us this afternoon, despite two years of pressing deflationary policy. We still have a balance of payments deficit that would have been utterly unacceptable in any previous period—although in previous periods our economy never had the benefit of North sea oil and self-sufficiency.
Yet again today the Chancellor did nothing to stop history repeating itself as tragedy. There is no strategy to this Budget—merely expediency. There is no effort in this Budget—or in any other of the Government's policies—to help to create an environment in which productive industry can thrive and become more competitive.
There was no sign—not so much as a hint—of any significant policy for promoting industrial investment in research and development and technology transfer. The best that we got was a way—a welcome way—of trying to help companies that have hit particular difficulties as a result of the Government's policies. There was no commitment to—and certainly no practical means were proposed for—maintaining macro-economic stability. In 12 years the Government have never managed to achieve the sustained low interest rates that are essential to that. The only way in which they have ever got inflation down is by throttling the economy with high interest rates—the opposite of stability.
In 12 years, the other critical ingredients of competitiveness and of combating inflation—sustained improvements in the transport system, training and education—have never been afforded the necessary priority by the Government. They were certainly given scant attention today. It appears that education—the cause of great anxiety among parents, the public and industry—is now made into a poll tax plaything, and the cuts go on. Let me give an example. Last week, 17 Conservative-controlled local education authorities announced £54 million-worth of additional cuts in education—the only reason being that they wanted to try to stay within the limits set down by the Government, who are supposed to have education close to their heart.
Now, if the Government have their way, education is to be balkanised into a tangle of opted-out schools and underfunded colleges as the chaotic experiments of the 1980s are extended into the 1990s. Now we know what the Prime Minister really meant when he told The Times a few weeks ago that, although education was "closest to his heart", his thoughts were not yet "fully worked up".
I approach this issue,
said the right hon. Gentleman,
with an instinct that something needs to be done and we are trying to determine exactly what it is.


While the Prime Minister is "trying to determine" exactly what he wants for education—while the Prime Minister is dithering—millions of other British people with children approaching school age and of school and college age are worrying. Industrialists and potential employers are urging a new scale of provision and performance and investment in education. All are looking at our neighbours who are making the proper investment in education and training so that their people reap the rewards of new skills and their economies reap the rewards of extra strength and competitiveness.
The Chancellor of the Duchy of Lancaster seems to think this funny. He is going to have to explain how it is that, after 12 years of Tory Government, Britain still has skill shortages in the middle of a deep slump. He will have to explain why numerous industrialists and employers—people who are his political allies—hotly condemn the Government's absolutely miserable record over all these years. From this Government and in this Budget, we get no commitment comparable to that made in our neighbouring competitive countries. There never will be that commitment.
In 12 years of power, with £100 billion-worth of oil revenues, £62 billion-worth of assets sales and the highest tax burden in British history, the Government have never made the necessary investment. Just last week, we heard the Prime Minister say:
We have been going in a particular direction for 12 years and we shall continue to go in that direction".
I suppose that that was intended to reassure the Finchley matriarch and her remaining followers. The Prime Minister's words are a warning to all those who, during these 12 years, have been engulfed by spreading poverty. It is a warning to the victims—those who have had security and success snatched from them by unemployment, high interest rates, business failure and high mortgage rates. It is the victims of industrial decline, and decay in the essential community and welfare services, who should be warned. The Prime Minister's words are a warning that the Government, who are
going in the same direction
as they have been for the past 12 years, will take Britain and the British people further behind.
In the depth of recession, we needed a Budget to build out of recession. We needed a Budget that helped to lay foundations for future economic strength. Instead, we got a Budget from a Government who will not learn from their own failures and—even worse—will not learn from the success of others. The British people know that that is true. They know, too, that this Government ruled over the wasted decade of the 1980s. When the Government call the general election and give them the chance, the British people will stop them wasting the 1990s.

Mr. John Biffen: The Leader of the Opposition has an enviable record as a Welsh rugby union coach, but as I watched him at the Dispatch Box this afternoon it was more in the discipline of cricket that I judged him. He resembled nothing so much as the batsman who had found that the wicket had turned overnight. He has discovered—and it is much to his distress—that the Conservative party does not intend to limp across the election battlefield with the ball and chain of the

community charge. To the right hon. Gentleman's discomfort, the Conservative party has taken a radical way out of the dilemma and met the challenge.

Mr. John Lee: We have shot his fox.

Mr. Biffen: I do not think that the Leader of the Opposition has ever been on a horse in his life—and if he has been on a horse, he has certainly never been hunting, so we can now return to the more relevant analogy afforded by the cricket field to describe the proposals for changes in the financing of local government.
The right hon. Gentleman showed his irritation because the debate has shown the striking reality that so much of local government is conducted at the behest and under the control of central Government. From my study of the life of Aneurin Bevan I have always judged that to be the case. It was Aneurin Bevan who told the story of his pilgrimage from the meanest local authority in Monmouthshire up to Westminster—always looking to discover where the reality of power lay. I say that for the benefit of Welsh Labour Members, who know in their hearts that it is true.
What has been adduced today is an attempt to bring about a better balance between the forces of finance and authority. Anyone who has any doubts about where authority has always sought to be in this matter need only think of Shirley Williams who, as Secretary of State for Education and Science, tried to require universal comprehensive education throughout England and Wales. That is an indication of the underlying realities.
The Chancellor's remarks about the future financing of local authorities will form the basis of a very relevant debate, and I believe that the balance of judgment will conclude that wise decisions have been made. Given the way in which the judgment has been presented, one could suppose that it involves a hypothecated increase in value added tax for the replacement of the community charge or part thereof. Of course, that cannot be so—it is merely the point at which the debate opens. We are talking about the use of the wider resources of central Government taxation for the financing of local authorities, not about any particular aspect of central Government taxation.

Mr. Kevin Barron: Why did the right hon. Gentleman serve in a Government who reduced the percentage of money provided for local government by central Government?

Mr. Biffen: I am happy to answer that question at once. It was——

Mr. George Foulkes: A mistake.

Mr. Biffen: Yes, it was a mistake. I am prepared to appear before any audience with the hon. Gentleman: I will plead my mistakes and he will plead his certainty, and I know who will get the vote.
The issue of the public sector borrowing requirement has returned to our Budget debate after an absence of some time. I feel no joy at it once again being part of the Budget debate, but I accept that, with the general state of the economic cycle, it is reasonable to budget for a certain amount of borrowing. That also places a restraint on our rhetoric about and our objectives for income tax. From now on income tax, with other central Government taxation, will have to bear its responsibility in the financing of local government. That does not mean that we


cannot have as our objective an income tax rate of 20p in the pound, but it will be a considerably more difficult objective to secure, and our rhetoric must adjust to that.
I wish to touch on just two or three points because many other hon. Members wish to take the great debate forward. I do not pretend that there is a great theme running through my speech. I cannot deny my initial appreciation that the right hon. Member for Islwyn (Mr. Kinnock) should be so discomforted about the replacement of the community charge.
My right hon. Friend the Chancellor rightly laid great emphasis on the need for a business revival. I declare an interest, and my business interests are listed in the Register of Members' Interests. I hope that when the Finance Bill goes into Committee, some thought will be given to the current levels of investment allowances. I did not hear that matter feature in my right hon. Friend's speech, but I hope that it is not out of his mind.
I do not think that any hon. Member expected interest rates to feature in my right hon. Friend's statement. I can remember Budgets, even from this Government, which concealed interest rate changes. I see the author of one—my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe)—sitting not so far from me. There have been other diversions this afternoon, but continuing and substantial reductions in interest rates would be most advantageous of all to the business community.
It is obvious that we are under the shadow of a general election. We should not be too sensitive about that—it is expected that we should so react. I have noted a certain reticence by Opposition spokesmen. I do not say that the Labour party has a hidden agenda, but there are certain aspects of the development of economic policy that it would prefer to elaborate beyond the electoral chasm——

Mr. Allan Rogers: What are they?

Mr. Biffen: It is a process of education—a sharing of knowledge with the hon. Gentleman. I have a document——

Mr. Kinnock: It is the 1979 manifesto.

Mr. Biffen: I assure the right hon. Gentleman that it is much better than that. It comes from the Institute for Public and Policy Research—a recently furbished intellectual hothouse that is part of the redesigning of the Labour party to make it fit for alliance with the Liberal Democrats. It is presided over by Lady Blackstone and Lord Donoughue, the aristocrats of Labour. They have commissioned a Mr. John Grieve-Smith who worked in the economic section of the Cabinet Office arid the Treasury—what a lineage.
With that background, the document has been presented by that body, which moves so closely with the Leader of the Opposition and his Front Bench——

Mr. Derek Foster: No, it does not.

Mr. Biffen: The hon. Gentleman should not deny it—that would upset Lord Donoughue's day.
The Times said:
A report by the Institute for Public and Policy Research says that … Britain's entry into the exchange rate mechanism has made the case for a co-ordinated pay strategy even more urgent … Mr. Grieve-Smith says that the government must reach agreement on pay policy with the CBI and the TUC not as a short-term expedient but as part of a long-term strategy for economic management.

Well, there are none like the old ones. Those of us who recollect the 1960s and 1970s will feel a certain nostalgia about that.
I hope that I am giving a little good-natured guidance to the Leader of the Opposition. I promise him that I will be a better friend to him than most of those who sit around and about him. I want to know why those distinguished academics were scooped out of the Treasury and put under the wing of Lady Blackstone. The process is intellectual beyond belief. It is dotty. They want the TUC to carry out an incomes policy backed by Government statute. Yet only 38 per cent. of employees belong to trade unions. There has been a remarkable fall of about 25 per cent. in the unionised work force since 1979. The very forces which could not deliver in the 1960s and 1970s are being invoked now by the intelligentsia who flank the Leader of the Opposition. This time, they offer the prospect of success from an even more rickety machine.
I tell the Leader of the Opposition that that is not part of the hidden agenda—it will be part of the open debate at the coming election. There will be a growing interest, especially among the Liberal Democrats, to know where the right hon. Gentleman stands on these issues. He has had a comparatively easy time with endless good-natured discourse across all the affairs of the nation and the world without ever having to reveal very much. I must tell him that his salad days are over. We are approaching an election and a debate, and I look forward to that.

Several Hon. Members: rose——

Mr. Deputy Speaker (Mr. Harold Walker): Order. A large number of hon. Members who have sat through the debate so far want to take part. Brief speeches would be appreciated.

Mr. Stuart Bell: Thank you, Mr. Deputy Speaker, for calling me so early in the debate.
My right hon. Friend the Member for Islwyn (Mr. Kinnock) was right to draw the attention of the House to the fact that 3,000 jobs are being lost and 100 businesses being liquidated every day. That contrasts with the Chancellor's speech, which lasted one and a quarter hours, but did not once use the word "unemployment". The right hon. Gentleman said that his Budget was intended to assist business to recover from the recession in the short term and to invest in the long term. The Government have had 12 years to provide such a Budget, but they have not done so, and they did not do so today.
We hear a great deal from the Tory party about recessions being due to economic cycles. We know all about the cycles of the Tory party. We can go back to Anthony Eden in 1957, who introduced a Budget in the April that reduced income tax by half a crown, and another in the autumn, after an election, that increased it. We can go back to the great dash for growth by Anthony Barber in the early 1970s, which gave us the inflation that Labour inherited in 1974.
The Chancellor heaped great praise on his predecessor, the right hon. Member for Blaby (Mr. Lawson). He talked of economic miracles. He was proud of the fact that there were economic miracles. At the Dispatch Box, he read press cuttings from Germany, the United States and Japan showing how Britain was having an economic miracle. Today, we have had some of the truth from the new


Chancellor of the Exchequer who said that he did not believe in miracles. It has taken us 12 years to get such an admission.
The Chancellor said that inflation would be down to about 4 per cent. in the autumn, and no doubt there is a plan to bring interest rates down as well so that by the autumn they are about 10 per cent. We see how the Government and the Chancellor have lost control of the economy, to such an extent that the Chancellor was unable today to announce a reduction in interest rates. We will have to wait until tomorrow in this three-instalment plan—the Budget today, a cut in interest rates tomorrow and the abolition of the poll tax on Thursday. It is not surprising that the Prime Minister is tired. I have every sympathy with him. To have to preside over such a week must be trying for him.
We know all about the cycles of this Government. The first cycle from 1979–81 gave us inflation of 21·9 per cent. We have been here before. In 1981–83, unemployment was 3 million. Again, we have been here before. We see the simple equation between high interest rates, lowering inflation and unemployment. Again, the unemployed are taking the full strain. Only recently, Barclays bank announced 4,000 lay-offs countrywide, and the Midland bank announced 5,000 lay-offs during the year. Years ago, joining the bank meant a job for life. That is no longer the case. One of the consequences of the past 12 years of Thatcherism has been the end of the security of a job for life in the service industry, just as happened in the early days in manufacturing industry.
Those of us who try to speak early in the Budget debate each year have argued all along that the consequences of a single club policy would be high interest rates. We said that jobs would be destroyed, and jobs have been destroyed. We said that firms would be destroyed, and firms have been destroyed. We said that tax receipts would be reduced, and we have seen that again in today's Budget. We said that social security payments would be increased, and we have seen that again in today's Budget.
It is hardly surprising that falling receipts and rising social security payments mean that the public sector surplus, of which the Government were so proud for so long, is now on the increase, and we have a PSBR of £8 billion. The Chancellor did not tell us from the Dispatch Box what the PSBR was forecast to be in the year ahead. No doubt that again is a consequence of the fact that we shall have to wait until Thursday to discover the true consequences of the abolition of the poll tax.
Opposition Members have consistently said that squeezing inflation out of the economy cannot be the only goal of an economic policy. There has been no industrial strategy, no training strategy and no planning for the future. All we have had is the encouragement of a never-never land of gearing and credit which reminds me of Oscar Wilde who, when he died in Paris, said that he was dying as he had lived—beyond his means.
The British consumer has, for the past 12 years under the Tory Government, been living beyond his means, encouraged by a Government who do not believe in planning, in intervention or in steering the economy towards manufacturing. On the one hand, they said that the citizen must cut excess borrowing and spending, but on

the other they encouraged him to borrow more and to spend more, to live for today as if there were no tomorrow. Such a policy can clearly be described as short-termism.
The medium-term financial strategy, the Government's great strength in the early years, their great policy on which everything was based, gave us short-termism. We have heard nothing today about soft landings. We have had a variety of definitions of a recession. One was that a recession occurs when economic growth falls for two quarters in succession. Dr. John Bridge, chief executive of the Northern Development company, has described it as negative growth. I prefer the more mundane and earthly description of a former President of the United States, President Truman, who said:
It's a recession when the man next door loses his job. It's a slump when you lose yours.
There is no prospect, Mr. Deputy Speaker, of you losing your job, but we can see clearly where the Government have taken us.
Between 1979 and 1981, Teesside lost so many jobs that the unemployed could have filled Ayresoine Park football stadium twice over. As my right hon. Friend the Leader of the Opposition said, the recession is in the south and in the midlands, but it is creeping into the north. We have seen that over the past few weeks. British Steel has told the public on Teesside that it will be shedding 360 jobs in the next financial year. The unions claim that the figure is more likely to be between 500 and 600. Smaller firms are going into liquidation–50 jobs here and another 50 jobs there.
The Chancellor said today that the car industry was growing in strength, but Minories is closing a garage with a loss of 25 jobs. Even ICI, the great provider of work in our area, is introducing local working arrangements which will reduce jobs. This is a recession by 1,000 cuts.

Mr. Richard Holt: The hon. Gentleman likes to give the downside on Teesside, but perhaps he would like to give the upbeat side with the number of new jobs that have been provided by MTM, a growing and expanding chemical company. Our local chamber of commerce has said that the real problem is that we will not have enough skilled people in future rather than a shortage now. I understand that the hon. Gentleman has unemployment problems in his constituency, but my constituency has not, and that is in Teesside as well.

Mr. Bell: I anticipated the hon. Gentleman's question, and I have the unemployment statistics for his constituency of Langbaurgh, where 4,532 people, or 6 per cent. of the work force, are out of work. In Stockton, South, another constituency close to mine, 4,507 people, or 10 per cent. of the work force, are out of work. The hon. Gentleman might soon have to address the question of those 4,532 people who are out of work. When he says that there is a shortage of skills, he must ask who, after 12 years of a Tory Government, is responsible for that. I shall be glad to give him the Labour party's programme, worked out by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), which shows clearly the Labour party's training policy so that those skills will be provided in future.
The Chancellor mentioned some benefit to football last season and some new scheme for sport in his Budget today. He reminded me somewhat of the super-sub who had been brought on to the field with only 10 minutes to go, whose aim was to score the spectacular goal. There he


was, hovering on the touchline. There he was down by the corner flag. There he was afraid to be caught offside. There he was running away from the ball—anywhere but where the action was.
This is the Chancellor's first Budget but it may well be his last. We have had a one-club policy, and it may be that we shall have a one-term Chancellor. He was timid and unimaginative. He did not produce a Budget for jobs or for people. He has lost control of the economy. As I said, he could not even tell us whether interest rates would be reduced tomorrow. He will be relieved of his job as soon as the referee blows the whistle and ends the game, when we have a general election. Then, and only then, will he and the rest of his team be put out of their misery.

Mr. David Knox: In the Budget debate last year I followed the hon. Member for Middlesbrough (Mr. Bell) and it is my good fortune to do so again today. The factual bases of the hon. Gentleman's speeches are usually accurate, but I detected two inaccuracies today. First, he said that the Chancellor did not refer to unemployment, when he did. Secondly, he suggested that R. A. Butler had reduced income tax by 2s 6d in the pound in 1955; in fact, it was only 6d, which is a fifth of 2s 6cl. We tend to forget those values now that we are on a different system.
I congratulate my right hon. Friend the Chancellor on his Budget—the first, I hope, of many. His two predecessors set high standards with their Budget speeches which were well constructed, to the point and commendably brief, and my right hon. Friend maintained those standards.
At this stage in a Parliament it is inevitable that the Budget will be judged on its likely electoral consequences rather than on its economic consequences. My right hon. Friend got it right on both scores. It is an extraordinarily good Budget.
I agree with my right hon. Friend the Member for Shropshire, North (Mr. Biffen) about the increased proportion of local government expenditure which is to be met in future by central Government. That is long overdue. Taxes raised locally have been contributing far too much to local government revenue for too long, because most of the real decisions about local government expenditure are taken in the House rather than locally.
The reduction of £140 in the poll tax—I call it the poll tax although I appreciate that my right hon. and hon. Friends on the Treasury Bench have to use the term "community charge"—will be very welcome in my constituency, as it will be throughout the country.
It is unpleasant that VAT will have to go up by 2·5 per cent. to finance the reduction in the poll tax. The Labour party has been criticising the Government for some time because too much local government expenditure has been met locally. rf it is to beinet centrally; the tonsequence is that it has to be paid for, either by increasing taxation or by reducing expenditure on other things. The Opposition outburst when my right hon. Friend the Chancellor announced the 2·5 per cent. increase in VAT suggested to me that they were dodging the task of facing the real issues and the hard decisions that have to be taken by any Government.

Mr. William Ross: rose——

Mr. Knox: I am not giving way—Mr. Deputy Speaker asked us to be brief.
I welcome the changes announced concerning child benefit. The initial changes are small but, most important, the Chancellor intimated that child benefit will be index-linked to inflation from next year. Some of us have been very concerned about child benefit for some time. We are delighted that in future we shall not have to rebel against the Government to show our opposition to their failure to uprate it.
I also welcome the changes in company taxation. We need only consider the state of industry to realise the necessity for a better cash flow if much of industry is to survive. Therefore, it is particularly important that the Chancellor should have proposed changes in corporation tax, an increase in the VAT threshold and the other measures. Those should be helpful in strengthening our industrial base.
On the general state of the economy, a year ago the main economic problems facing the country were inflation and the balance of payments. Now the problem that looms above all others is the recession, although the balance of payments is still a cause for concern. As a result of Government policies over the past couple of years, inflation has been largely brought under control. It has fallen in recent months and it is likely to fall to about 4 per cent. by the end of the year, as my right hon. Friend the Chancellor pointed out.
Unfortunately, the policies of high interest rates and tight credit that have been so successful in curbing inflation are the same policies that have forced us into recession. Output is falling, profits are falling, investment is falling and, alas, unemployment is rising. That is not a happy position, and action must be taken to reverse those trends. There is urgency about it because of the time lag between taking action and the action becoming effective.
The economy desperately needs the stimulation to growth which only lower interest rates can bring. I welcome the action that the Chancellor has already taken in that respect. I urge him to continue the process over coming months. Lower interest rates are essential if we are to avoid a more serious recession than that of 1980–82 when the manufacturing sector was particularly hard hit; already there are signs that it is being badly affected again.
I often wonder if the importance of manufacturing industry is fully appreciated. Obviously, it has to try to meet the domestic demand for manufactured goods and to keep imports to a minimum, but it is also important in relation to our export performance. Government figures show that, whereas about 80 per cent. of manufactured output is internationally tradeable, only about 20 per cent. of the service sector is, sp if we are to have a healthy international payments position we must have a strong competitive manufacturing sector.
Alas, the recent history of manufacturing gives little cause for comfort. Between December 1973 and December 1990—a period of 17 years—output in manufacturing industry rose by only 3·5 per cent. The House will note that that period covers the terms of office of the last Labour Government and of the present Conservative Government. There is, therefore, no party political capital to be made from that poor performance.
It is worth recalling that the increase of about 3·5 per cent. in manufacturing output in the last 17 years compares with an increase of about 70 per cent. in the


previous 17 years. Of course, that sorry tale is not just the fault of the Government. The conduct of management and of trade unions has left a great deal to be desired.
The Government can and must contribute to the strength of the manufacturing sector, particularly by improving the economic environment in which it operates. In that respect, as I mentioned earlier, lower interest rates are essential for three main reasons. First, they would help to increase demand for goods produced by manufacturing industry. Secondly, they would encourage higher investment in new plant and machinery, which would improve efficiency and increase capacity. Thirdly, they would ensure that the owners of capital received a higher return from investment in manufacturing industry than from fixed-interest securities.
I mentioned earlier that we still have a balance of payments problem, although it is less serious than it was a year ago. It is pleasing to note that the figures for 1990 showed that the deficit had declined by a third compared with the previous year. But we must remember that economic growth has been held back in the past year. When that happens, the balance of payments tends to improve. The great worry is that when the economy starts to expand again, the deficit will increase once more. When we consider that we have been in deficit to a fairly substantial extent over the last four years, the worry is that we shall face very large deficits again in a year or two.
The only conclusion to be drawn is that there is something fundamentally wrong with the exchange rate of sterling and that an adjustment is needed. We are now in the exchange rate mechanism of the European monetary system. Membership of the ERM is important and stable exchange rates are important for the manufacturing sector in particular. I believe in the disciplinary effect on inflation of British membership of the ERM, and I have no desire to undermine our membership, but it would be strange if we had got the value of sterling right when we joined—indeed, it seems that we did not. I believe an early adjustment should be made, but it should be made clear that it is a one-off adjustment, so that we in no way undermine the disciplinary effects of membership of the exchange rate mechanism. It should be made clear to foreigners, and to those who are worried about confidence in sterling, that it is a one-off move and that we strongly believe in the discipline of the ERM.
I believe that it is very important that we should be in the exchange rate mechanism, but at the correct level for sterling, because in that way the current account of our balance of payments can be in balance over the years. It also provides price stability to importers and exporters and anti-inflationary discipline. Moreover, if we adjusted the value of sterling within the mechanism on a one-off basis it would be possible to lower interest rates because it would not be necessary to keep them at their present high level to maintain the present value of sterling.

Dr. David Owen: The House has listened to what will probably be viewed as the first social market budget. I wish that it had been produced by a Social Democrat Chancellor, but since the Conservative

party seems to be joining the Christian Democrats, perhaps we may agree that we are now witnessing social market economics in this country.
The social priorities spelled out in the Budget are welcome and totally new for this Government. They have not been demonstrated for eleven and a half years. For example, the emphasis upon mortgage tax relief being confined to the standard rate taxpayer is thoroughly welcome and socially correct.
The decision to increase child benefit by 12 per cent.—after its real value has fallen during the past eleven and a half years—although modest, is extremely welcome and seems to mark a major shift in social priorities because the Chancellor accompanied it with a commitment that child benefit would go up in line with inflation in future, as with all other basic benefits. We welcome that strongly.
The third social element in the Budget which is extremely important is the 15 per cent. increase on cigarettes, which are a killer drug and have been treated with kid gloves for far too long by this Government. That is the right social priority, as was the courageous decision to increase petrol by 15 per cent. because, in social terms, cars are an expensive element in the transport infrastructure.
I would not welcome those social changes were they not also accompanied by some worthwhile changes on the supply side of the economy, aimed at improving efficiency and competitiveness of the market economy, which is necessary for a social market to operate effectively, as one cannot finance some of the social concerns unless the market is operating efficiently.
That leads me to the crucial test of the Budget—has the Chancellor played fast and loose with inflation and with consumer spending? I acquit him of the charge of doing so. People will say that this is an election Budget, and the decks are certainly cleared for an election in June, October or next year, but given the circumstances, it is not an electoral-bribing budget. It is not as irresponsible as some of the Budgets that the right hon. Member for Blaby (Mr. Lawson) triggered off, particularly before the 1987 election, which caused a flagrant consumer boom. However, the Budget will have its electoral payback, because I would not be surprised if the international market were not prepared for a substantial cut now in interest rates. That is also the core priority.
By emphasising business, the Chancellor has chosen the right medium-term priority. My only anxiety is that by relaxing corporation tax and reducing it—although in many ways that is welcome, especially as it will give extra liquidity to companies that are being severely squeezed, which will get worse in the next few months—the corporate sector will act as it has so often done before when there has been a little relaxation, and will take the pressure off the wages front.
I only hope that it does not do so, because the one fundamental that must come from the squeeze is a permanent reduction in our tendency to pay ourselves more than we earn. If we are to stay within the exchange rate mechanism—especially at present exchange rates—unit costs have to be reduced, and our competitiveness has to improve. That means wage increases at a level of 4 or 5 per cent. That is why I also welcome the incentives for more profit-related pay, which also has a social market connotation. That is also why I welcome the principle of shares for all employees and the carrot to introduce that. I welcome the Chancellor's implicit statement that he


would not hesitate to use the stick to introduce that—and he may well have to carry that out. It has been scandalous that top executives have given themselves share options at attractive rates but have not provided similar options throughout the firm. Again, that is another welcome switch towards the social market economy.
The fundamental requirement is to be bold over interest rates. If I was Chancellor, I would give the world a little time to absorb this Budget. Because of the changes in local government financing, it is more complex than it appears at first sight, but when the world has absorbed it, people will realise that the Chancellor has not taken risks with the economy, and he will be fully justified in taking 1 per cent. off interest rates now and a further I per cent.—perhaps in two tranches of 0·5 per cent.—during the next few weeks. If there are risks to be taken on the back of this Budget, it is urgent that that should be done by cutting interest rates quickly. For a variety of reasons, it was not easy to reduce interest rates in the late autumn last year and in the early part of this year, although the situation demanded and necessitated it. Now the room has been found for a substantial cut.
As regards the ingenious—in my view, wholly correct—massive shift in local government finance, people who think that this is a boring Budget have not yet realised the full impact of that shift. The Budget will transform local government finance and it is high time that that happened. The crucial decision by the Chancellor—which any Chancellor would make given the total mess that local government finance is in—was to raise compensating revenue by a mechanism that he knows will deliver it, by raising value added tax by 2·5 per cent. That was the right way to claw back that money.
In my judgment, increasing VAT was right in any case, as our VAT rate has been well below the average in the European Community. Although it is not necessary that everyone has exactly the same VAT rate for the proper functioning of a European common internal market, it is a distortion if there are marked discrepancies. Therefore, it was logical and inevitable that we would raise our VAT rates. Doing so at this time, with inflation decreasing fast for other reasons, is wise. It has the added advantage that the poll tax fed through to the retail prices index in a dramatic fashion, and the Chancellor has assured us that the increase in VAT will be covered by the cuts in poll tax.
The next logical step, which I imagine will be announced in the next few days, is to take three elements out of local government finances. The first two are the fire service and the police, both of which are carefully monitored and are effectively agency-run by local government at the moment, with the Home Office operating strict manpower controls, and also inspectorates. The third element has to be education. That has already been advocated by the Social Democrat party to the Secretary of State for the Environment's present review. Increasingly, SDP policy seems to be followed by the Government with a rapidity exceeding that of the Labour party.
If education comes out of local government spending—as is right—it will not be as much of a centralising measure as some people imagine, because of the greater degree of self-management in schools. It is also extremely important that that change is accompanied by a considerable strengthening of Her Majesty's inspectorate of schools. Also. a greater measure of independence, radicalism and toughness on education policy will have to

be brought into the inspectorate. I hope that the inspectorate will not continue as a mutual support agency for the Department of Education and Science. If it had a measure of outside independence, such as through the Audit Commission, it would be greatly improved.
Such a change would alter the whole structure of local government. It is logical that there should be single-tier authorities, but they should be flexible. They do not automatically have to be the same—the units of local government vary in different parts of the United Kingdom, with considerable benefit. That would lead to the question of how to raise the money. We and the Liberal Democrats would prefer a local income tax as the way of raising the revenue for the smaller number of local government services.
I believe that as far as possible local government should raise the revenue for the services that it provides with the exception of the needs element, with the extra provided by central Government to compensate for areas of low pay, where people cannot raise all the revenue themselves.
I should prefer a local income tax, but it seems that there will be a property tax. I urge the Front Benches of the Labour and Conservative parties to get together, at least informally, to introduce a property tax that they could both support. After the fiasco of the poll tax, a new property tax should not be introduced which would be subject to massive change.
Before people think about that with mock horror, they should remember that there was a moment when the Government were about to change the state earnings-related pension scheme. However, they drew back from that idea—prudently, in my view. There are a few matters which must stick across the political divide and which must not be subject to massive change before a general election. State pensions is one such matter, and the basic structure of tax is another.
It is no good the Government introducing a new property tax that is not supported. Therefore, although the Conservatives may want the element of head tax to be built into the property tax, because it means that they should not have to eat so many of their words on the poll tax, I beg the Government not to introduce it. It is clear that the Labour party will not support it, and neither shall we. Not many people believe that it would be a sensible way of introducing a property tax.
The Government should opt for the pure property tax without the add-on factor, which is merely a face-saving device. It will not lose them much, as they have had to eat nearly every word about the poll tax. They will not be able to recoup everything by this extra add-on. Definite benefits will accrue to a political party that admits that it has made a complete foul-up and has changed its policy.
I say that without any particular interest. I and my party attacked the poll tax from the moment it was introduced. It was the wrong tax. It was unfair, and it was an administrative nightmare. It seems that it will fall because of its administrative costs and because of the inability to collect it rather than because of any other factor. However, it also deserved to fall because of its unfairness.
The Budget matches the difficult and strained circumstances. Nobody can be certain that we shall come out of this recession in the rather optimistic time scale mentioned by the Chancellor. Much will depend on the international economy, for which the signs are reasonably optimistic. There seems to be an upturn in the United


States economy, but there is considerable concern about the Federal Republic of Germany. The costs of bringing the east German economy into balance with that of the Federal Republic are considerable.
It is necessary to live within the disciplines of the exchange rate mechanism. That is why I believe that any talk of using a realignment of currencies as a way of devaluing would be a major mistake. Therefore, I do not quite share the views of the hon. Member for Staffordshire, Moorlands (Mr. Knox). I believe that the exchange rate mechanism is a flexible mechanism which allows member countries to change their exchange rate if they get out of kilter with the rest of their economic management.
That is why I still retain a considerable scepticism about a fixed exchange rate system that is a single currency. I wish that we would stop using the term "single currency", because people equate it with a common currency. For the European Community, a common currency is a thoroughly desirable development, but a fixed exchange rate system in the European Community is open to serious objection. It would be rare for the 12 members of the Community to be able to live within a fixed exchange rate system and to accept that draconian discipline. Bretton Woods was never a fixed exchange rate system. One had the freedom to choose to devalue, even if with considerable difficulty.
I do not want it to be easy to change the exchange rate system. An exchange rate system that is too flexible allows politicians to escape some of the necessary internal disciplines. The ERM is an effective and rather subtle discipline within which we can live. There will come a time when we should opt for the narrow band. At the moment, the odds are against that because, if we did, there would be a tendency to revalue upwards, or at least the risk of doing so. The pound is not so competitive that we can afford to disadvantage ourselves further at this stage. I should go for the narrow band, but not quite yet.
There are considerable uncertainties elsewhere in the Budget, but the Chancellor has made some worthwhile judgments, not least in freezing the married tax allowance to give him greater freedom in future reform. My main objection is that he has not been generous enough with child benefit. To catch up the 12 per cent. deficit, it will be necessary—next year and the year after—not just to inflation-proof child benefit, but to increase it.
All the statistics still show that poverty is confined mostly to families which have many children under the age of 16. We need to do more for them, because, even though value added tax—because of its zero rating of many key items—is not as regressive as the Leader of the Opposition tried to make out, nor is it a progressive tax, we need contervailing balances, one of which would be a generous child benefit system.

Sir Anthony Grant: I find myself in the pleasant position of agreeing broadly with nearly all that the right hon. Member for Plymouth, Devonport (Dr. Owen) said. I am pleased that the SDP embraces some of the ideas that I recommended a quarter of a century ago, but I shall refer to that later.
I was interested to hear the hon. Member for Middlesbrough (Mr. Bell) quote Oscar Wilde. I was reminded that, as Oscar Wilde was dying in Paris, the last thing he did was turn and look at the wallpaper in his dingy hotel and say, "One of us has got to go". That is probably the Government's attitude—one can relate Oscar Wilde to the community charge, and the wallpaper to the Government. I think that the wallpaper—the Government—will survive without the community charge.
Since I entered the House many years ago, I have been a strong advocate of three main issues—small firms, wider share ownership and the need to switch from direct to indirect taxation. Therefore, I can safely say that I am as pleased with this Budget as I was with last year's.
I shall deal first with small firms. There is no doubt that they have suffered probably more than the rest of industry, because they have been less able to bear the difficulties of the recession. Therefore, I welcome the concessions made on corporation tax and on the collection of bad debts.
I should like to draw attention to one point in particular., I have lost count of the number of times that I have leapt up when Treasury Ministers were answering questions and asked whether they would please do something to raise the level at which VAT is imposed on small firms. It was far too low. It was ludicrous that somebody whose earnings were just within the £20,000 rate and who was struggling to get work should have to go through all the pantomime and suffer the rigours of the draconian Customs and Excise. I can say with absolute delight that the Chancellor has done the right thing. It will be welcomed not only by me, but by many small and growing firms.
I referred earlier to wider share ownership. With that as with small firms, when I was an enthusiast 100 years ago, no one was interested. The Government were not especially interested, and the Opposition did not want to know. Small firms and wider share ownership are now fashionable, and I am delighted. There is more joy in heaven …
With the late Maurice Macmillan and others, I was a founder member of the wider share ownership movement before I came to the House. We strongly advocated employee share schemes and we produced many schemes. As the right hon. Member for Devonport emphasised, the schemes were not intended to be only for top cosseted directors and high executives of large public companies. We intended the idea to spread down to the work force, and our dream was that the man who worked on the factory floor would, instead of reading the Daily Mirror or a comic, ask for the Financial Times.
We have not quite reached that stage, but the Chancellor has taken a step in the right direction. Share ownership will spread. As with the spread of ownership of property, the spread of ownership of shares is a bulwark against dictatorship and the intruding powers of the state.
We also advocated that there should be an easier system through which people could acquire shares. Nobody is more fond of the stock exchange and of stockbrokers than I am. They are a marvellous professional body, but they are not and never have been geared to the needs of the very small investor. Such investors cannot afford stockbrokers, because they are too expensive. Other methods had to be found. The unit trust movement and, to an extent, investment trusts were a start in that direction. We advocated what I believe to be necessary—that we should enable people to buy shares over the counter in high street


shops. The Chancellor must have looked at some of our ideas of 25 years ago. We are delighted that he has taken them on board after all this time.
I warn my right hon. Friend that strong pressure will have to be brought to bear. The stock exchange and financial institutions are not geared to our ideas. If the Chancellor and his team can show determination that there should be an opportunity for people to go into shops—not necessarily Woolworth—and banks in the high street to acquire small blocks of shares, there will be a dramatic spread of share ownership. I welcome the measures that my right hon. Friend has proposed.
I am sorry to keep saying, "I told you so," but I have been in the House for quite a long time, and it is 25 years since I first recommended that teachers' salaries should be a charge on the Exchequer. I did so because teachers' salaries are negotiated nationally. They are the biggest item of local authority education expenditure, and by statute since 1944, the Secretary of State for Education and Science has had a duty to maintain a supply of teachers. That was never taken seriously. It was frowned upon by bureaucrats and other Pooh-Bahs in county councils and education authorities, so nothing was done. We do not know yet, but such a change may be announced on Wednesday or Thursday.
I agree strongly with the right hon. Member for Devonport that one should not give the impression that the necessary switch from local to national finance can be carried out painlessly. There is no such thing as a free lunch, and there is no such thing as free education, free health, free police or free fire services. It all has to be paid for. I am glad that those services are being paid for by an increase in VAT.
The Government came to office determined that there should be a switch from direct to indirect taxation. We advocated that switch because direct tax—income tax—is a tax on work, which everyone has to do, on effort and on initiative. Indirect taxation, whether VAT or the old purchase tax, is a tax on spending. If people desire to be thrifty and to control their own spending, indirect taxation is the right choice. A shift has been necessary, arid the Budget contains a further shift, which is right.
We are in recession. I have said several times in the House how much I hate the interest rate policy. My right hon. Friend the Prime Minister, when he was Chancellor, heard me pontificating on the subject. He always responded courteously and thoughtfully, although he did not always agree with me. I hate high interest rates, because they afflict the people who are least able to bear them. They benefit the haves, but they severely hurt the have-nots.
There are two sectors in the have-nots. Small firms have to borrow. No firm ever developed unless it borrowed, and one cannot get an industry going without borrowing. That is why I disagree so strongly with the sanctimonious puritans who hint that borrowing is wicked. Of course it is not. The same is true of home owners. How many people ever bought a house without borrowing? Only a handful of rich people could do that. Most home owners and most small firms have to borrow money, so I reject the puritanism that says that borrowing is wrong. People who have to borrow have been the most heavily hit.
All Governments—and perhaps Conservative Governments more than others—suffer from a disease that I call accountantitis. The disease operates as follows. If a firm overstretches itself, accountants are called in. The

accountant sorts out the books and says, "I have cleared everything. There is nought on both sides of the ledger." Suddenly, no one is making shoes, ships or boots. A country can suffer from the same danger if the clamps are put on too ferociously.
As I interpret the Budget, in macro-economic terms, it is intended in the recession to get Britain and British industry on the move again. It is a Budget for business, and that is why it has my wholehearted support. Provided that it is accompanied by a steady reduction in interest rates, there will be a steady reduction in inflation. My right hon. Friend the Prime Minister's forecast last year that there would be a steady trend downwards of inflation which would lead to a steady trend downwards of interest rates will come true. If the Budget, which is a step in the right direction, is later accompanied by a steady reduction in interest rates, the confidence so necessary if our country is to thrive in the 1990s, and which my right hon. Friend the Prime Minister wants so much, will be achieved.

Mrs. Alice Mahon: I wish that I could agree with the hon. Member for Cambridgeshire, South-West (Sir. A. Grant). I wish that it was a Budget for manufacturing industry and for industry as a whole. I am afraid that the Budget will go down in history as the poll tax Budget. Given the great hardship caused to millions by the poll tax, given the Prime Minister's and the Chancellor's support for it, and given the fact that the Prime Minister now says that the tax is uncollectable, it would have been nice to see proposals for reparations for the victims of that tax in the Budget. However, the Prime Minister and the Chancellor will no doubt plead that they were only obeying orders for the past five years.
The Budget has not addressed the real problems facing the country. Commenting on the task facing the Chancellor this week, The Sunday Times said:
The economy is in the middle of what could be the deepest recession since the war. Unemployment has been rising for a year and is heading back towards 3 million. Company failures are at record levels. Many of the high-flying business successes of the 1980s have crashed spectacularly. Company profits have slumped. Young people given positive encouragement by the Government to buy their own homes, have found their dream has turned into a nightmare. Inflation remains unacceptably high … Interest rates are 13 per cent.
I make no apology for quoting at such length from a newspaper which normally supports the Government and is often reluctant to criticise Government policy. We should consider the Budget in the context of that damning indictment of the present state of the economy.
The fact that the country is in the deepest recession since the last war is nowhere more evident than in my constituency—and, no doubt, those of many of my hon. Friends. In the past few months, job losses have averaged 210 per month; in the travel-to-work area of my constituency and the neighbouring constituency of Calder Valley, more than 3,000 jobs have been lost in the past 12 months—good, highly skilled jobs that will not be easily brought back. In almost every instance, the employers who had to announce job losses or factory closures blamed the Government's policies, especially those that have led to high interest rates.
People should be reminded constantly that the present Prime Minister—as Chancellor and as a Treasury Minister—and the present Chancellor are responsible for the scale of the present recession, and for the mess in which we now


find ourselves. I do not accept the Chancellor's argument that we should blame high wage increases. The Government always fall back on that argument, but the public are increasingly aware of the identity of the guilty people—guilty men, in this case.
I am sorry that the Prime Minister has left the Chamber, because last week I received a letter from a constituent—an employer—that was addressed to him.
The letter began:
Dear Mr. Prime Minister,
THIS COUNTRY IS GOING DOWN THE DRAIN.
It continued:
In 1983 due to the recession, I was in the unfortunate position of being made redundant from a large Machine Tool Manufacturer in Halifax, as the Company ceased to manufacture in the U.K.
Due to difficulty in finding employment, I decided to form my own company and therefore capitalise on the skills which I had acquired through working for 22 years in the machine tool industry. I would like to think that this was a successful move and until recently I employed 25 people".
The letter went on to describe the success of the venture, and how hard the staff had worked. It continued:
I along with many other small companies am facing difficult financial times and possible bankruptcy.
When will someone in government realise that without a manufacturing base Britain's economy cannot and will not survive. After all, we cannot become a nation of shopkeepers relying solely on banking and the service industries. Without a manufacturing base, the import situation becomes more predominant which in turn increases the balance of payment problems.
Over the past few months, I have been trying to widen my customer base, but have constantly been met by a doom and gloom syndrome from the major manufacturers in industry as many companies are on short time and are facing forced redundancy programmes or even closure.
Someone in your government made a statement in the recent past that with regard to inflation 'If it isn't hurting it isn't working', well Mr. Prime Minister it definitely is hurting, because more and more people are not working, not if I may comment, the best way to cure inflation.
We have had 11 years of Tory misrule, and have been warned many times that we would find ourselves in our present position. In 1985, the House of Lords produced an excellent report on overseas trade which warned of the consequence of neglecting manufacturing industry. I quoted from that report at some length in my first speech in the House. The report stated:
Cheaper money would lead to more investment. The Government should have more regard to the needs of industry as a borrower when they take a view on interest rates.
It seems that that plea has been completely ignored.
Many other warnings and recommendations have been ignored over the years. Earlier this year, the CBI president, Sir Brian Corby, launched a fierce attack on the Government's economic policies, accusing them of interest rate overkill. He also warned that high electricity prices would deal a savage blow to major manufacturers; none the less, prices have been increased excessively.
The newly privatised water companies have also increased their bills. Yorkshire Water has introduced an increase of 12·7 per cent., 3 per cent. more than inflation. That has proved very damaging to industry, especially the textile industry. I make no apology for mentioning the industries which operate in my area. Textile production requires the use of a good deal of water, and the increased costs have helped to damage the chances that the industry might have had of making a recovery.
Although the small amount of assistance that the Budget will give to businesses may help a little on the margins, the Chancellor's speculations that it would achieve anything dramatic were, in my view, wildly optimistic. It will do nothing to help the crippled house building and construction industries, or to help young people who are desperate to learn a skill. Recently, I told the House about a 17-year-old in my constituency who had been made redundant twice. In the local paper, he pleaded for the chance to become a joiner. That is a skill that we shall need in the future. I hope that there will be a happy ending for that young man because of the publicity given to his case, but thousands like him have been neglected and thrown on the scrap heap by the Government. The Budget does nothing to address training needs, and I know that my hon. Friends will have more to say about that.
The Government have not yet responded to the latest disturbing report from the House of Lords. Entitled, "Innovation in Manufacturing Industry", the report told the Government what they should be doing. It pointed out that there was
no net investment in manufacturing industry during the 1980s",
and that
if market forces alone are to determine the course of events it is conceivable we will end up with no significant British owned manufacturing industry in the U.K.
The same report found that the United Kingdom was the only country in which gross domestic expenditure on research and development had declined as a percentage of gross domestic product between 1981 and 1989, and that that decline had been largely the result of a reduction in Government support for research and development.
Such a serious and irresponsible neglect of research and development during the oil-rich years is unforgivable. The Government have thrown away the chance to invest in this country's future with the ease and abandon of Mississippi gamblers, without showing any remorse—certainly the Chancellor's complacent Budget speech showed none.
When hon. Members raised the recession and the consequent problems in their areas with Ministers, as I did recently, the response was a deliberate misquotation of a CBI report on Yorkshire and Humberside. That was an attempt to cover up the Government's neglect of the manfacturing industry. I have a copy of the report. The Minister concerned clung to the straw provided by the observation:
Against the national trend, business optimism actually fell by less in January. On balance though respondents were still heavily pessimistic about the business situation compared with a year ago.
The Minister seemed to think that that allowed people to feel proud of how well their areas were doing. That is nonsense—Orwellian doublespeak of the worst order.
The same report said that the food, drink and tobacco industries were not doing too badly; but the Chancellor now proposes to increase VAT by 2·5 per cent., which will harm some of those industries. It will hit the largest factory in my constituency—Nestle, previously Rowntree Mackintosh—which has been very successful. In the United Kingdom, manufacturers of chocolate and sugar confectionery and chocolate-coated biscuits pay the standard rate of VAT, while all other foods are zero-rated. They are therefore already at a disadvantage. Surely a KitKat is part and parcel of a snack meal nowadays, and


I do not believe that VAT should be charged. The proposed increase will make it more difficult for successful companies to compete and to sell.
The Budget contains no measures to help the low paid, and only a pittance for recipients of child benefit to be paid in October. Anyone who has studied the subject of child benefit, or has read any of the excellent reports from the Child Poverty Action Group, will know that child benefit constitutes investment in the next generation. It will benefit future generations. The Government have behaved disgracefully, first by freezing child benefit and then by increasing it by only a small amount. It is ludicrous to suggest that VAT is a fair form of taxation. Like the poll tax, it takes no account of income and is deeply regressive. Everyone pays the same amount of VAT.
The Budget is timid and lacks vision, reflecting the leadership of the Conservative party, and I am certain that it will be the present Chancellor's first and last Budget.

Mr. Richard Page: The two-inch or three-inch wadge of Treasury notes, briefing papers, departmental press releases and other documents provided by the Vote Office to flesh out the Budget fills me with apprehension about taking part in the first day's debate on the Budget. In the middle of that wadge of papers there may be a statement that would destroy the raison d'étre for my speech. However, the Budget sends a clear message that the Government are their own Government, with their own style, that they are interested in enterprise and that they are pointing the way towards economic recovery.
I do not intend to indulge in speculation about the community charge. I want to see how it is to be reformed before passing any verdict. Nevertheless, the Chancellor's statement appears effectively to have shot the Opposition's fox. To judge from their faces, they did not welcome it with smiles and glee. They seemed to be extremely miserable. The Budget statement appears to be a substantial stride in the right direction and it ought to ensure that the Conservative party forms the Government after the election.
I intend to confine my remarks to businesses, particularly small businesses, and to consider the effect that the Budget will have on investment in manufacturing and research and development and on our attempts to defeat what is now called short-termisim. The move towards helping businesses is most welcome. It proves that the Government want to support and encourage small businesses. I hope that as a result of the Budget businesses will invest more in manufacturing and in research and development. That is the basis on which this country will go forward.
The Budget gives the lie to all those newspaper pundits who said that it would be a dull and boring Budget and that very little would come out of it. Indeed, it has been one of the most exciting and complex Budgets ever presented. It will be some time before all its ramifications are appreciated by the pundits. Over the years, the Government have set an excellent example by promoting the interests of small businesses. The Budget solidly reinforces their commitment.
The Chancellor mentioned a formidable list of items. To go through each one in detail would be unfair and would take up too much of the time at my disposal, but the

problem of bad debts has been recognised. In the past, if people did not pay their debts, small businesses still had to pay VAT on whatever had been sold. It is a significant improvement that that liability has been reduced to one year.
Cash accounting schemes are to be promoted. Small businesses—particularly small small businesses—do not keep fully up to date with the latest management methods. People have their noses too near to the grindstone and are too busy working away to worry about intricate financial opportunities. I am delighted, therefore, that Customs and Excise is to introduce a promotional scheme to increase the number of firms using the scheme from 100,000 to 300,000.
The Chancellor has announced that the VAT threshold is to be increased to £35,000. If I could be given £1 for every minute of debating time in the House during which I have pleaded with the Treasury to argue strongly that the European Community ought to increase the threshold, I should retire a very rich man. I am delighted that my right hon. Friend has been able to persuade the Community of the rightness of his argument. Many small businesses will be delighted at what he has achieved. It is a sensible proposal. It cannot make economic sense for Customs and Excise to run around trying to collect VAT from companies with turnovers between £20,000 and £25,000. The proposal is very much a step in the right direction. The same is true of PAYE collection. Quarterly collections will save Customs and Excise and in turn the Treasury high administration costs.
The easing of corporation tax will provide substantial support for both large and small businesses. Entrepreneurs will be encouraged by the capital gains tax proposals. The fact that the amount of relief is to be increased if they decide to come out of a business is also to be welcomed.
When further national assets are disposed of, I hope that use will be made of retail outlets in the high street. I hope that share shops will be set up so that people will be able to buy small numbers of shares through such outlets without having to flog up to the stock exchange and work their way through that expensive system. Small is beautiful. That could be a means by which people would be able to use the local marketplace to move into share ownership.
My right hon. Friend has done a magnificent job for the small business sector. He has presented an excellent Budget in tight circumstances. However, I intend to amplify the point made by my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) who pleaded for more investment in manufacturing and in research and development. This country's manufacturing base will provide for our future growth and development. To those who wave the service sector flag vigorously, I say, "Well done—good luck to you." However, we must never forget that 80 per cent. of our manufactures can be exported, compared with only 20 per cent. of the service sector.
In view of the limited time at my disposal, I must resist the impulse to repeat, word for word, all that I have said in the past four years about the need to invest in manufacturing and to defeat short-termism. However, we must not run away from the fact that as a percentage of our gross national product we, among all the G7 countries, invest the least in manufacturing. Is it a coincidence that Japan invests 50 per cent. more than the average invested by all the G7 countries? Furthermore, is it a coincidence that Japan has a balance of trade surplus, low inflation and low interest rates?
Our manufacturing investment has increased in the past few years. but the message of the past year or so is that it is tailing off. I sincerely hope that those who make the decisions about manufacturing investment will reverse that trend and invest money in the future of this country. The same is true of investment in research and development. The Government invests just as much as our competitor countries in research and development, but our companies do not match that investment. The arguments relate to short-termism. Financial institutions are obsessed with league tables, percentage returns and the failure of any company to hold its position, which means that its stock is automatically sold and it is at risk from a predatory attack.
I hope that the Budget will encourage our manufacturing industries and the companies which create the wealth of this country to take a longer-term view and to start to invest in our future. The past has not been encouraging for them. I do not often quote from newspapers, but I agree with the words of David Smith in The Sunday Times earlier this month, when he stated:
The well-publicised manufacturing revival of the later 1980s was from far too small a base and failed to keep pace with the much stronger rise in consumer demand.
That has to be reversed and investment made—only in that way can we stay ahead and provide the services that the Conservatives, as a caring Government, would like to provide for this country.
In conclusion, my right hon. Friend the Chancellor has made a substantial commitment to business, and especially to small business. He has given relief to companies to help with cash flow problems. It is up to companies to use that. I hope that the financial institutions will not be too long in providing the same sort of support and encouragement. As I have said, the Budget sends a clear message to the country—that the Government are their own Government. They have their own style. They are interested in enterprise and in business, and point the way to recovery for the future.

Mr. Simon Hughes: People will have wanted above all to hear announcements from the Chancellor about two things in today's Budget—the poll tax and income tax. They have certainly heard something new about the first, but have not yet heard anything new about the second. People also wanted to hear that interest rates would come down. I guess that they will come down pretty soon, and the economy will not recover until they do——

Mr. Bell: That may be as soon as tomorrow.

Mr. Hughes: As the hon. Member for Middlesbrough (Mr. Bell) rightly says, that may be as soon as tomorrow. A reduction in interest rates is the precondition for many of the other things that everybody wishes to see.
Many things were not in the Budget which should have been. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) will address those issues more widely tomorrow. The money allocated to education is a minimal concession that does not go in the right direction. Money should have been put back into training, instead of

massive cuts being made that affect especially inner-city areas all over the country. Money should also have been announced for public transport.
Of course, there were some good things in the Budget. I refer to the rightful extra taxation on alcohol and tobacco, the second because it is bad for our health. There were also the rightful decisions to reduce mortgage interest tax relief for higher-rate tax payers, and to increase the amount of child benefit and index it in the future, which should have been done in the past.
Above all, there is one thing that the Budget was and one thing that it was not. The hon. Member for Halifax (Mrs. Mahon) said that it was the "poll-tax Budget". The hon. Lady did not get it quite right. This was the "end-of-the-poll-tax Budget" or the "after-the-poll-tax Budget". It was a blue Budget, because it was an electorally populist Budget, but it was also a red Budget—red with embarrassment about the poll tax mistakes of the past.
The hon. Member for Hertfordshire, South-West (Mr. Page) used one word many times in his speech"short-termism". I normally accuse the Government of short-termism, but on this occasion I applaud them for this one exception. If ever there was a short-term tax, it must be the poll tax. It will probably turn out to be the most short-term tax in British history. Within a year of its existence in England and Wales, and within two years of its introduction in Scotland, the Government realised that it needed to go. The electors of Ribble Valley, and my hon. Friend the Member for Ribble Valley (Mr. Carr), made certain of that.

Mr. Paul Boateng: Where is the hon. Gentleman?

Mr. Hughes: The hon. Gentleman asks where my hon. Friend is. He is here now. He was in his place throughout the Budget statement. He will be a Member of the House throughout this Parliament and, I am sure, for many Parliaments to come. Any hon. Member who can bring down the poll tax deserves to be re-elected until he decides to retire.
The one thing that the Budget was not was a green Budget, although the Government hinted that it would be. They said that there would be all sorts of green things in it, but that was a hollow sham. In terms of the environment, it was a grey Budget, because that was the one missing subject. It was hardly mentioned. The Budget confirms even more clearly than the White Paper produced by the Department of the Environment last year that that Department regularly loses its battle with the Treasury.
In his Budget statement last year, the then Chancellor—now the Prime Minister—claimed that one of the objectives of the Government's economic policy was to enable this country to take the opportunities of the 1990s. One of those opportunities is to deal with the environmental problems in this country and far beyond our seas. However, even the pale green policies in last autumn's Green Paper have not been followed through. The White Paper last autumn foreshadowed a series of measures to introduce new economic instruments. This Budget was the first opportunity—the unique opportunity—to do that. It was the test of the Government's green commitment—and a test which the Government have failed.
Where were the environmental measures in the Budget? Yes, there was the 15 per cent. on excise duty on fuel. There was an additional almost 1p differential between unleaded and diesel, and leaded fuel. Yes, there was the additional and very much delayed disadvantage to company car owners, which should have been introduced some time ago. However, that was all.
There was deafening silence on a charge to make polluters pay and on the use of market mechanisms as a means of controlling pollution. There was deafening silence on ensuring that new economic measures would be brought into the centre of this country's environmental policy.
We have proposed—this has been proposed in other European countries also—a pollution-added tax on activities that create pollution, with grants and subsidies to those whose activities are environmentally friendly. On transport, there should have been tax incentives for catalytic converters. The Government should have graduated vehicle excise duty to ensure that fuel-efficient cars attract less tax. The Government could have introduced zero VAT ratings for energy-efficient appliances, such as some heating appliances and home insulation materials. They could have reduced stamp duty for conservation measures in the home.
The Chancellor could have done many things in this Budget if he was committed to the environment as well as to the economy. However, there were only one or two environmental sweeteners in it—a little bit of green wrapping around one or two proposals, but there was nothing green at its centre. The Chancellor had the opportunity; he did not take it, so he failed. We shall have to await a different Government, a more committed Government——

Mr. Ian McCartney: A Labour Government.

Mr. Hughes: No, certainly not a Labour Government, if we are talking about environmental issues. We must await a different Government to ensure that we have a Budget that combines economic and environmentally sound policies. Sadly, we have not seen such policies today, and the Labour party could not provide them either.

Mr. John Lee: One learns that it is unwise to give instant reactions to any Budget and one must be even more circumspect than normal with this Budget. However, the one thing that must be clear to the whole House is that we have today seen act I of "The Abolition of the Poll Tax". I hope that we shall see act II on Thursday.
Today's substantial shift from local to central taxation paves the way for the abolition of the poll tax and its replacement with what I hope will be a more sensitive and intelligent property-based tax, which would be well received in my constituency of Pendle and, I suspect, in Ribble Valley also. In a lighter vein, may I suggest that if the poll tax is abolished, the Government should consider announcing a public holiday to celebrate that event. Perhaps we would see street parties and people waving and cheering up and down the country.
In a more serious vein, however, the Budget must be judged primarily as a backdrop to further reductions in interest rates. This essentially broadly neutral Budget can

only have helped in that regard. I would not be so cavalier as the right hon. Member for Plymouth, Devonport (Dr. Owen) but the Budget should pave the way for further step-by-step reductions.
Among the detailed measures in the Budget, I particularly welcome the measures to help the liquidity of businesses, including the changes in the VAT regulations and the delayed payment of PAYE and national insurance and the reductions in corporation tax rates. I also welcome the new personal training allowance and the measures to encourage further investment by employees in their own firms.
I was delighted that measures were announced to tackle tax avoidance through overseas trusts. They were long overdue. I also welcome the limiting of mortgage tax relief to the basic rather than the higher rates of taxation. While we all believe in owner-occupancy, one must question the huge amounts given over the years in tax relief to home owners, which contrast with the relative lack of investment in manufacturing industry. I was particularly disappointed in the lack of specific measures to help manufacturing industry.
Too many investment portfolios have become ossified by high rates of capital gains tax. Surely it is time to consider restoring the differential between short-term and long-term capital gains. Perhaps short-term capital gains should be taxed at the top rates and long-term capital gains at reduced rates.
I was particularly disappointed that there was no announcement in today's Budget about a national lottery, which has widespread support in the House. Useful as the football trusts will be, they will provide only petty cash compared to the amount that a properly constructed, organised and Government-backed national lottery could produce. I hope that before too long the Government will bite the bullet and announce a national lottery.
I wonder whether the introduction of the treatment of mobile phones as benefits in kind is worth all the administrative effort.
In conclusion, I congratulate my right hon. Friend on his first Budget. He compared himself with Desert Orchid. Desert Orchid recently fell in his last race. I regard my right hon. Friend's contribution as——

Mr. Eric Martlew: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is misleading the House. Desert Orchid came third.

Mr. Lee: In any case, Desert Orchid certainly did not win the race, whereas my right hon. Friend's Budget will unquestionably help us to move to victory in the coming general election.

Mr. David Madel: I am conscious that I must get a move on. I welcome the content and delivery of my right hon. Friend the Chancellor's speech. I am delighted with the change in philosophy on child benefit, which will be increased. I am delighted with what I think will be the introduction of share shops in Britain, which will make it much easier for the man in the street to buy shares.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) mentioned the 10 per cent. car tax. I went some way with him but we should remember that on 1 January 1993 all new cars throughout the EC will have to


have catalytic converters fitted by law. That will raise the price of cars to the man in the street, so there is a case for getting rid of the 10 per cent. car tax next year to take account of the increase, brought about by necessary environmental change.
I strongly support my right hon. Friend's announcement about changing the financing of local government. To increase VAT and reduce community charge bills is the correct way to do it. Naturally, I hope that my right hon. Friend will soon be able to follow up his measures with a reduction in interest rates.
I am glad to see that the vehicle excise duty has been frozen again. If there is to be any change in that, it should certainly favour smaller cars, which use less fuel. I welcome the reduction in corporation tax for businesses, which will make it easier for companies to improve their cash flow and bring about a tax system that will encourage business to invest more in equipment, research and development, and training, for we look to the manufacturing base to finance future prosperity. After all, we are in the business of changing from a net exporter of oil and a net importer of manufactured goods to a net importer of oil and, I hope, a net exporter of manufactured goods.
I am also delighted that my right hon. Friend the Chancellor of the Exchequer has tilted his business policy to encouraging British industry to be absolutely ready by way of training and investment for the single market in 1992 which will be upon us so soon.
In his Budget speech last year the then Chancellor said:
growth should return in 1991 towards its sustainable rate of around 2.75 per cent."—[Official Report, 20 March 1990; Vol. 169, c. 1013.]
I appreciate that there is a temporary standstill, but, from what my right hon. Friend said in his Budget last year and from what was said this afternoon, it is hoped that we shall resume growth later this year and, thereby, begin to reverse the unwelcome increase in unemployment. As I said, in the 1990s we shall see a transformation of the economy in Britain and we simply must be more conscious of the need to improve our manufacturing base.
I also welcome the tax changes on training. I have a specific point to make on the new benefits that employees will be able to claim as tax relief. As I understand it, the fees to the providers of the education or training will attract tax relief. Will that also apply to examination

certification fees the travel, subsistence and accommodation costs incurred when people go for training and the cost of books and equipment? There has been a welcome change to encourage employees to better themselves by going in for more training. I welcome what my right hon. Friend the Chancellor announced this afternoon, but I hope that it will be an all-embracing change that will mean that individuals who take the trouble to retrain themselves can claim tax relief on the costs which are inevitable if one retrains, as manufacturing industry changes and greater opportunities arise.
Of course, there is an important role for the public sector in what my right hon. Friend the Chancellor rightly referred to as his anti-recession, anti-inflation Budget. In the public sector we need more performance-related pay and more locally determined pay and conditions. The public sector must adapt and bring in the best practices of industry in the way in which it settles pay and conditions. There is not yet enough performance-related pay in the public sector. There is no reason why the public sector should not quickly adopt the best practice in industry throughout Britain.
The public services include the much-improved services that have been announced for retraining unemployed people. Several changes have been made in the past 10 years in the way in which we manage our training and employment services. I hope that the training and enterprise councils, which are organised on a county basis, will be effective in delivering quality training at the local level. It is only by responding to the needs of local industry and satisfying its training needs that we shall be ready to take advantage of the single market and improve the quality of goods in Britain and the quality of training of those who produce them.
The measures in the Budget need time to take effect. His measures on business taxation and corporation tax, his change in philosophy in child benefit and his reorganisation of local government finance all need time. There is absolutely no need to rush to the country and ask for a mandate. The Chancellor of the Exchequer needs at least 12 months for the wise, progressive and imaginative proposals in his Budget to take effect and to take root in the country. When he has given us a second Budget we can go and talk nicely and politely to the electorate and, I am sure, enter a fourth term of office.

Debate adjourned.—[ Mr. Neil Hamilton.]

Debate to be resumed tomorrow.

Business of the House

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The House will have heard my right hon. Friend the Chancellor of the Exchequer announce in his Budget statement that my right hon. Friend the Secretary of State for the Environment would introduce legislation shortly to authorise payments of extra grants to local authorities and to ensure that community charge payers will reap the full benefit.
I thought that it would be for the convenience of the House—[Interruption.] —I am sure that it would be for the convenience of the House and more generally if I made a short business statement about the arrangements for handling the Bill.
In view of the urgent nature of this legislation, the Bill will be published on Thursday. It will be proposed that all stages of the Bill are taken on Tuesday 26 March and are preceded by a timetable motion to achieve this.

Dr. John Cunningham: This is an act of sheer desperation on the part of the Conservative Government, an act of panic—the Government taking action which truly merits the hackneyed phrase of the Tory party: "throwing money at the problem".
Will the Leader of the House make it clear that it is the Government's intention to introduce a guillotine to force this Bill through the House next week, and that proper debate on the use of between £4 billion and £5 billion of taxpayers' money is to be curtailed to suit the convenience of the Tory party and the Government? Is it not already clear that this one-off, desperate measure will mean that the poll tax will stay in place for many people? This is not an abolition of the poll tax Bill; it is a buying-off of opposition to the poll tax Bill.
I make it clear that there can be no guarantee in advance that the Labour party will give an easy passage to this legislation or support it in the Lobbies.

Mr. MacGregor: The hon. Member for Copeland (Dr. Cunningham) will know from the Chancellor's statement that this follows the Chancellor's conclusion that local taxes are being asked to bear too large a burden and that the level of the community charge is still too high. That was the clear explanation in the Chancellor's speech.
I can confirm that there will be a timetable motion. The reason for that is that I believe that both local authorities and all community charge payers will wish the House to pass the legislation swiftly to ensure that the arrangements can be put in place and that Parliament will have completed its work before we rise for the Easter recess. It will enable the arrangements to be put in place. That is very much what local authorities would wish and certainly what community charge payers would wish. That is why we are doing it.
I have noted that the hon. Member for Copeland indicates that the Labour party will fight this tooth and nail——

Mr. Paul Boateng: He did not say that.

Mr. MacGregor: All right, they are not going to fight it tooth and nail, but they are going to go on opposing—I am not exactly clear what they are doing. Let me put it this way. The Bill will be published on Thursday. I hope that, when the hon. Gentleman and his colleagues see the Bill,

they will realise that it is very much in the interests of community charge payers, and that it is therefore desirable that the Bill gets through as quickly as possible.
Once the Bill is published, it will be part of the Budget debate, so it will be possible to debate the issues involved, since it is part of the Budget statement, on Thursday and on Monday as well as throughout Tuesday. That is plenty of time for the House, and I therefore think that the motion that I have proposed is a sensible one.

Several Hon. Members: rose——

Mr. Speaker: Order. I must remind hon. Members that we are now in private business time. [ Interruption.] Well, we are, and the statement is a very narrow one.

Mr. David Harris: Does my right hon. Friend agree that the only desperation is on the part of Opposition Members who see their foxes shot, not least their allegation that the Government have been dithering? What on earth are they complaining about?

Mr. MacGregor: I agree with my hon. Friend. After due consideration, we have come to conclusions, and we are now taking decisive action. That is the right thing to do.

Mr. A. J. Beith: Will the Bill to which the Leader of the House has referred affect England, Scotland and Wales, and will statements be made to the House by the Ministers concerned?
Can the Leader of the House tell us of any previous occasions, and if so when, on which a significant piece of local government and tax legislation was forced through the House of Commons on a guillotine motion in one day?
Can the Leader of the House tell us whether, having had to throw money on the scale of billions into the hole that the Government have created with the poll tax, he is now prepared to throw democracy out of the window at the same time?

Mr. MacGregor: The Bill will cover England, Scotland and Wales, and it will be clear, as I say, when it is published on Thursday. That will give plenty of time for the House to consider the Bill. I am advised that the Bill is a short one and that there will therefore be enough time for it to be fully considered before we come to debate it specifically on Tuesday.
There is at least one precedent: the Finance (Income Tax Reliefs) Bill, which went through in one day on Thursday 17 November 1977. I seem to recall that the party of the hon. Member for Berwick-upon-Tweed (Mr. Beith) was participating in a pact round about that time, but it went through in one straight day.

Mr. Peter Viggers: Is my right hon. Friend aware that his statement today will be very enthusiastically welcomed in areas such as Gosport, which has a modest rateable value and where therefore the impact of the community charge was quite heavy? Is he also aware that, between the Budget statement and this business statement, there was a most successful meeting between the Chancellor of the Exchequer and Conservative Members upstairs, and that perhaps the warm welcome for the Budget is the reason why the Labour party is so upset?

Mr. MacGregor: I am sure that my hon Friend is absolutely right on the second point. On the first point, I am sure that not only is it to the advantage of the


community charge payers of Gosport that we get this Bill through quickly, as we propose, but also that they will benefit from the community charge reduction scheme.

Several Hon. Members: rose——

Mr. Speaker: Order. I ask hon. Members not to make points that might legitimately be made during the course of debate, or party political points. For the convenience of the House, this is a statement about this new Bill; we should confine our questions to that.

Rev. Martin Smyth: I welcome the statement, because it reflects the fact that the Secretary of State for the Environment has paid attention to the contributions of my hon. Friends the Members for Londonderry, East (Mr. Ross) and for Antrim, South (Mr. Forsythe). Will this Bill therefore include the welcome news of the Chancellor for the ratepayers of Northern Ireland, or must we wait until another occasion? It would be a scandal if it were not included in the Bill.

Mr. MacGregor: The important point is what the Chancellor said in his statement—that domestic rate bills in Northern Ireland will be reduced as well.

Mr. David Wilshire: Will my right hon. Friend comment on the Labour party's reaction to his statement? Does he agree that their behaviour——

Mr. Speaker: Order. That is just what I hoped hon. Members would not do. Ask about the business statement, please.

Mr. Wilshire: That is precisely what I was doing. We have a business statement, and we must consider the response to it. Opposition Members are reacting to my right hon. Friend's sensible suggestion like a bunch of headless chickens. They are clutching at anything because they are desperate to prevent us doing precisely what they asked us to do. What is all the fuss about?

Mr. MacGregor: I agree with my hon. Friend. I am surprised at their reaction because I have announced that we intend to proceed with the Bill in a way that is convenient not only for the House but for local authorities and many others. They want to know the timetable applying to my right hon. Friend's statement in relation to the Bill. That is all I have announced and I believe that it will be for the convenience of all and will be widely supported.

Mr. Dafydd Wigley: Does the Leader of the House accept that the organisation of, and financial arrangements for, the poll tax differ in England, Scotland and Wales? Given the time constraint on the debate on Tuesday, will he give an assurance that the Secretary of State for Wales will make a statement on Thursday about the implications of the changes that are the background to the financial change that we shall discuss on Tuesday?

Mr. MacGregor: My statement tonight is purely about the business handling of the Bill: it is not about the wider background or about anything to do with the community charge more generally. I am tonight simply talking about the arrangements for carrying the Bill through.

Several Hon. Members: rose——

Mr. Speaker: Order. It might be for the convenience of the House if I remind hon. Members that the Leader of the House has already said that the issues will be debatable during the passage of the Bill. I think that I shall have to take into account, when I come to draw up my list of hon. Members who wish to participate in that debate, those who are raising issues now.

Mr. Bill Walker: Will my right hon. Friend confirm that the narrow Bill in question will be designed specifically to ensure that Scottish community charge payers, among others, will get the benefits of the transfer from community charge to value added tax, which I recommended in my paper—[Interruption.]—on the subject?

Mr. MacGregor: I am sure that my hon. Friend will try to catch your eye, Mr. Speaker, in the debate, but I confirm that that is what the Bill is about.

Mr. David Blunkett: Is the right hon. Gentleman aware that for the last 12 years Opposition Members have pressed the Government not to withdraw the billions of pounds in resources that have been taken out of local services? So we are the last to be churlish about putting money back in that direction.
Earlier in the day, your Deputy in the Chair, Mr. Speaker, called this the mother of Parliaments. To push through a Bill in one day, curtailing debate on issues as complicated as how local authorities will deal with the consequences of the community charge reduction scheme, the rebate scheme and the administrative costs and chaos that will result—the residents of the borough of Wandsworth will end up with no bill at all in the coming year for the provision of local services—is unacceptable, especially on such matters of major national importance.

Mr. MacGregor: I cannot comment on the first part of that supplementary question, which is a matter for another debate. The Bill does not relate to all the points to which the hon. Gentleman latterly referred. It is a straightforward, simple Bill to fulfil what the Chancellor talked about this afternoon. That is why the time that we are giving to it, as well as the time that will be available during the Budget debates to deal with it, is adequate.

Mr. David Shaw: Will my right hon. Friend give an assurance that there will be enough time to discuss the Bill next Tuesday, bearing in mind the fact that, according to my calculations, it will benefit tens of millions of people, and that the only people who will be worse off are single-person households who spend at least £5,000 a year on VAT-able goods and services and double-person households who spend at least £10,000 a year on such items? In other words, a great contribution towards the community charge reductions will be paid by foreign visitors, tourists and wealthy people. Are Opposition Members proposing that those people should be supported?

Mr. MacGregor: Without going into the details, I am sure that my hon. Friend is right that large numbers of people will benefit from the Bill and will wish to see it proceeding through Parliament as quickly as possible, given that it is short and that the issues are straightforward. Not only should they have that benefit, but local authorities should have the opportunity to know exactly where they stand, so that they can make their


planning arrangements before the financial year begins. There are clearly many reasons in favour of the procedure that I have put to the House.

Mr. Dick Douglas: Is the Leader of the House, as something of an exiled Scot, aware that Scotland was used as a guinea pig for the poll tax? We had it a year ahead of any other part of the United Kingdom. Is it not a trifle bizarre that the Bill which we shall debate next week and which will be pushed through expeditiously will absolve some payments in Northern Ireland, in terms of impact of rates, when the people there have never had the poll tax? Although we in Scotland will have had it for nearly three years, we shall receive only the same type of compensation as will be awarded to charge payers in England and Wales.

Mr. MacGregor: I do not think that any points relating to the procedure or the business statement arise out of that supplementary question.

Mr. Cecil Franks: Is my right hon. Friend aware that his proposals and suggested timetable are warmly welcomed by his hon. Friends, especially as they show at long last the Government's determination to get to grips with local government spending, which has got totally out of control? Is he further aware that his proposals will be welcomed nowhere more than in the county of Cumbria, where the county council showed its total lack of ability to control expenditure, in that, with a £302 million budget, it set its spending £1,000 below the capping level?

Mr. MacGregor: My hon. Friend has given good reasons to support the procedure that I am recommending to the House and that we hope to follow next week.

Mr. Robert Sheldon: Is the right hon. Gentleman aware that there is no precedent for acting in the way that he proposes? Almost immediately after hearing the Budget statement, the Leader of the House tells us that a panic measure is afoot and that we are to look at the whole of local government finance in one day. When that issue was last looked at, it took several years. There was supposed to be "nothing ruled in, nothing ruled out", with a full discussion and examination of all the issues. That is now being telescoped into one day's debate. It is scandalous.

Mr. MacGregor: I am surprised at the right hon. Gentleman, who is normally very fair about matters of this type and considers them carefully. He is suggesting that the Bill is about the whole area of local government finance and is one of the outcomes of the community charge review. The Chancellor made it clear this afternoon that that was not the case. He said:
My right hon. Friend :the Secretary of State for the Environment will be announcing very soon the conclusions of our review of local government.
The Bill is about the Chancellor's statement this afternoon that local taxes are being asked to bear too large a burden. It is about that one issue. I am beginning to think, from the way Opposition Members are reacting, that they are rattled—[Interruption.] We shall be interested to see their reaction to the Bill and hear sustained and detailed objections sufficient to show that the proposal that I am announcing is not reasonable.

Miss Emma Nicholson: Does my right hon. Friend agree that, in the past six months, the methods of tax collecting for local government and matters concerned with the duties of local authorities and the ability of people to pay for them have been exhaustively discussed, in a way that they have never been discussed before? Does he further agree that many of those debates have been called by Her Majesty's Opposition when the utter emptiness of the arguments have been matched only by the emptiness of the Opposition Benches? My right hon. Friend's timetabling on this occasion is totally correct.

Mr. MacGregor: I agree with my hon. Friend.

Mr. Peter Shore: This is not the time to speak about the merits or demerits of the Bill, but it is certainly the time to speak about the Government's proposals to handle—or, rather, mishandle—its passage. No local government finance measure has ever been treated in such an extraordinarily abrupt and dictatorial way. The Leader of the House is inflicting on us nothing short of contempt. He is using procedures which the House has used in the past to deal with grave national crises simply to rescue himself from the serious political crisis in which the Tories find themselves.

Mr. MacGregor: That is simply not the case. I am merely announcing how we intend to proceed with the Bill to which my right hon. Friend the Chancellor referred. As next week is the last week before the Easter recess, it must be for the convenience of the House to have this information. Of course, I shall make the normal business statement on Thursday. On that occasion, I shall announce the rest of the business for next week and, I hope, some of the business for the week of our return. Clearly, it will be to the advantage of all those affected by the Bill that it should be proceeded with expeditiously, so that the legislation may be in place before the start of the financial year. That is why we are taking these steps.

Mr. Ian Bruce: May I support Opposition Members, particularly those from Wales and Scotland, who are quite rightly calling for three Bills? This measure is intended to ensure that local taxpayers will pay less. Surely it would be only fair to equalise percentages among taxpayers in Scotland, in England and in Wales. My constituents will probably have their community charge reduced by at least £200, while those in Scottish and Welsh constituencies will get a reduction of only about £100.

Mr. MacGregor: My hon. Friend raises a wider point that he may wish to deploy on another occasion. My right hon. Friend the Chancellor, in his Budget statement, made clear what the Bill will achieve and what the community charge reduction will be. As the change will apply throughout the country, one Bill is the right way to proceed.

Mr. Ken Eastham: While the Opposition readily welcomed the Government's proposal, I put it to the Leader of the House that, in view of the agony in which the Government now find themselves, they ought to explain the position of the thousands of people who are at present in the process of being prosecuted. Will the prosecutions be suspended as a result of this legislation?

Mr. MacGregor: The hon. Gentleman must know perfectly well that this Bill relates to next year: my right hon. Friend the Chancellor made that clear. Throughout the country, there is condemnation of those who have refused to pay the community charge this year.

Mr. Roger Knapman: Does my right hon. Friend believe that those hon. Members who so far have not paid any part of their community charge may be tempted by this announcment to do so?

Mr. MacGregor: I think that I made the position clear a moment ago.

Mr. Robert Wareing: Now the the Tory flagship has proved to be about as watertight as the Titanic, will the Leader of the House tell us what we are entitled to know? What will the title of the Bill be, how many clauses will it have, and will the timetable motion be taken between 3.30 pm and 7 pm on Tuesday? Is this House to be asked to deal with an entire Bill on local government finance between 7 o'clock and the end of the parliamentary day? What is proposed is for party convenience rather than for parliamentary convenience.

Mr. MacGregor: Actually, it is for the convenience of the wider public. The Bill will be introduced tomorrow, and will be published on Thursday. We shall also publish a timetable motion this week. The detail of the proposal will then be clear.

Several Hon. Members: rose——

Mr. Speaker: Order. As I have already said, we are eating into private business time. I shall allow questions on the business statement to continue for a further seven minutes.

Mr. D. N. Campbell-Savours: The Government will not buy off the British electorate with this money. People are not stupid; they know what is going on. Throughout the north-west of England, where people's anger will not be abated by this announcement, there will be much concern. People will still be faced with poll tax bills on average of more than £250. The Leader of the House quoted a precedent for what is to be done on Tuesday. Can he confirm that the 1977 legislation was not guillotined?

Mr. MacGregor: In his opening comments, the hon. Gentleman strayed very wide of the business statement. The Bill to which he referred went through in one day. We believe that, in the interests of the wider public, including the hon. Gentleman's constituents, it is right that this Bill should complete its passage next week.

Mr. Harry Ewing: Does the Leader of the House realise that, even at this late stage, there is such a thing as credibility in politics? If the right hon. Gentleman ever had any credibility, he has done his best tonight to shed it. His handling of this measure is an absolute affront to the House of Commons. It was he who extended the length of the Easter recess. Now he has the nerve to tell hon. Members that, while they are about to have an extra week's holiday, the Government intend to guillotine legislation that will have a vital effect on every person in this country.
The Leader of the House and his hon. and right hon. Friends are pathetic sights. Having queued up to obey a three-line Whip by going through the Lobbies to introduce

the poll tax and, thereby, punish the people of this country, they will queue up to obey a three-line Whip on Tuesday by going through the Lobby in support of legislation to get rid of it. This is sheer political opportunism, for which the British electorate will not easily forgive the Government.

Mr. MacGregor: I refute the hon. Gentleman's charge. I am slightly sorry that he made it. I have tried to make it clear that the purpose of trying to get this Bill through next week, irrespective of the Easter recess, is to enable all the necessary procedures to be put in place before the beginning of the financial year. There is no connection with the extra week in the Easter recess.

Mr. Harry Cohen: Will this Bill be amendable? It will get rid of only one third of the poll tax bills of Londoners next year. Some hon. Members, including myself, would like to get rid of the other two thirds. Indeed, we should like to see the Bill do away with the whole poll tax system. Will it be possible to amend the legislation in that way?

Mr. MacGregor: The Bill is about the issue which I have described and to which my right hon. Friend the Chancellor referred this afternoon. If the House should so decide, this measure, like any other, may be amended.

Mr. John Battle: Can the Leader of the House confirm that, today, he sent the chief executives of all local authorities a message that they should suspend the dispatch of all poll tax bills? Can he confirm that local authorities will be reimbursed for the chaos caused by something whose purpose was to convenience the Government? Or will he tell us that, having ridden roughshod over local authorities for the past 12 years, the Government are about to ride roughshod over Parliament?

Mr. MacGregor: That is not really a matter for me. It does not relate to the business statement. While I cannot go into details, I can say that I understand that local authorities will be reimbursed for their administrative costs.

Mr. Peter L. Pike: The Government are taking the unprecedented step of guillotining a Bill before it has been published. Is it their intention to go even further and curtail the democratic rights not only of this House but of another place to debate the Bill? The Government seem to be intent on setting new precedents and devising new ways of negating democracy.

Mr. MacGregor: For reasons that I have already explained, it is desirable that we get the Bill through both Houses of Parliament before the Easter recess. We hope that it will be possible to have all the stages completed next week. The reason for my making this statement tonight is that everyone should know what is proposed.

Mr. Bruce Grocott: In a business statement lasting a mere two or three minutes, the Leader of the House has demeaned both his office and himself. [Interruption.] We can take very easily the sneers and jeers of the right hon. Gentleman's hon. Friends, who will have to jump through a hoop willingly, just as they jumped through a hoop in the opposite direction in the last two or three years. The job of the Leader of the House is to protect the interests of its Members.
I wish to put to the right hon. Gentleman two questions that so far he has been totally unable to answer. First, is there any precedent for a Bill of this sort being guillotined and taken through in a day? Second—the simplest of all questions—will the right hon. Gentleman tell us, with the benefit of his inside Cabinet knowledge, what the Bill's title is?

Mr. MacGregor: I am sorry that the hon. Gentleman made that last point. As Leader of the House, I am doing what I have been frequently urged to do—keeping the House informed as early as possible of arrangements proposed for the recess and for everything else.
I do not quite know how a Bill of this sort would be defined, so I cannot answer the hon. Gentleman's first question—purely in relation to the guillotine, that is. As for his second question, it is surely right to follow the usual process, which is that, when the Bill is introduced, its title will become known.

Dr. Cunningham: Does not the Leader of the House owe the hon. Member for Berwick-upon-Tweed (Mr. Beith) and the House an apology? Was not his answer about precedents for this Bill dishonest? Should not he now apologise for misleading the House when he said that there were precedents for Bills being treated in this way, because clearly there are none? Is it not clear that the Conservatives' flagship is being not so much abandoned as deliberately scuttled by all the Conservative Members who went through the Lobbies and voted for it? And will not people seeing hospitals closed, waiting lists for operations lengthened and schools crumbling be astonished that, although money is not available for those problems, £4·5 billion can be found to buy off opposition to the poll lax?
As the Leader of the House wants proper consideration of this Bill, why did he not tell us what it is called and how many clauses are in it? If he does not have a name for the Bill, I will suggest one: the Save the Tories' Skin Bill.

Mr. MacGregor: I hope, Mr. Speaker, that you will forgive me for straying into the hon. Gentleman's point of policy substance, but it is important to stress that what my right hon. Friend announced today was a change in financing arrangements, not a change in overall public expenditure.
As for precedents, for the avoidance of all doubt I reiterate that the precedent to which I referred when I responded earlier was one of many cases of all stages of Bills being taken in one day. [HON. MEMBERS: "They were not guillotined."] I have already explained, and will say again, just to make the position absolutely clear, that it is very much for the convenience of community charge payers, and especially for local authorities, that the arrangements should be put in place as quickly as possible after the start of the financial year. That is why we believe it important that the Bill should get through next week, and it is why we have decided to follow the procedure that I have outlined.
I have also stressed that I understand that this is to be a short Bill which the whole House will see on Thursday. There will be opportunities to refer to it on Thursday and on Monday as well as throughout its stages on Tuesday.

Several Hon. Members: On a point of order, Mr. Speaker——

Mr. Speaker: I call Mr. Lawrence.

Mr. Ivan Lawrence: On a point of order, Mr. Speaker. Surely the House is entitled to know that this Bill is to be called the Labour (Shooting of Fox) (No. 1) Bill?

Several Hon. Members: rose——

Mr. Speaker: Order. I will take some points of order, but the House must bear in mind other hon. Members' time, into which we are now eating.

Mr. Beith: On a point of order, Mr. Speaker. A few moments ago you said, and the Leader of the House repeated it—perhaps trying to acquire the authority of the fact that you said it—that it will be possible for us to debate the contents of this Bill on Thursday and on Monday. That will not help Members who speak in the debate tomorrow, but there is a more important point than that.
Those of us with experience of Bills such as the poll tax legislation know that their details are explored only by way of amendment. You will recall, Mr. Speaker, that Conservative Members tabled amendments to the poll tax legislation which had great bearing on the problems that have since arisen. As I understand it—you will correct me if I am wrong—it will not be possible to table amendments to this Bill before we know its name, before it is published or, unless there is a special motion, before Second Reading; so it will not be possible to table amendments exploring the details of the Bill, or for Members to seek answers from Ministers on those details——

Mr. Speaker: Order. I never said that. If the hon. Gentleman was listening carefully, he will know that it was the Leader of the House who said it. What I said was that we can discuss this matter in business questions on Thursday——

Mr. Beith: Ah. Further to that point of order, Mr. Speaker. I understand that it will not be possible to refer to amendments to the Bill during proceedings on the Budget on Friday, Thursday or Monday, and that only the time allocated by the Leader of the House will be available for amendments, some of which may not even be considered. Am I right in that assumption?

Mr. Speaker: Quite right—everybody knows that.

Several Hon. Members: rose——

Mr. Speaker: Order. We are eating into private business time.

Mr. Max Madden: On a point of order, Mr. Speaker. It is evident that it is the Government who have placed you and the House in this difficulty. It is quite clear that there is no precedent for a major Bill of this sort being timetabled, so may I urge you——

Mr. Speaker: Order. What is the point of order for me?

Mr. Madden: May I urge you to urge the Government not to proceed with a guillotine motion, and to allow a second day for debate on this Bill?

Mr. Speaker: These are patently matters for the usual channels, not for the Chair.

Several Hon. Members: rose——

Mr. Speaker: Well, Mrs. Fyfe.

Mrs. Maria Fyfe: On a point of order, Mr. Speaker. It is not clear from what the Leader of the House said whether a Scottish Office Minister will be present for the debate to answer questions about the impact on Scotland.

Mr. John Maxton: Further to that point of order, Mr. Speaker. Will you now extend questions to the Leader of the House for at least another quarter of an hour——

Mr. Speaker: No, I will not—[HON. MEMBERS: "Why not?"] Because Scottish Members have been called.

Mr. Maxton: Further to that point of order——

Mr. Speaker: Sit down, please. The hon. Gentleman would be the first to complain if his time were taken up by points of order of this kind.

Mr. Maxton: Nonsense.

Mrs. Margaret Ewing: On a point of order, Mr. Speaker. You kindly referred to the fact that there was a need for the usual channels to negotiate aspects of the legislation. I wonder whether you, as protector of the House, can extract from the Leader of the House agreement to a meeting with representatives of all parties in the House before the business statement on Thursday.

Mr. Speaker: I am sure that that sensible suggestion will have been heard. Now we will proceed——

Several Hon. Members: rose——

Mr. Speaker: Order. I will call two more hon. Members and then proceed with the British Railways Bill.

Mr. Alan Meale: On a point of order, Mr. Speaker. I am sad that you did not take up the suggestion of my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) about extending business questions slightly——

Mr. Speaker: Order. I have already made my position clear. I have an obligation to protect the business of the House and other hon. Members who want to speak.

Mr. Bob Cryer: On a point of order, Mr. Speaker. As a guillotine has already been announced—unusually for a Bill—my point of order relates to the selection of amendments. You might be tempted to select only amendments that might fit into the pattern of the guillotine. It would help to show that some shred of democratic procedure is still left in the House—after these proposals by the Government—if you made it clear that you will not select amendments purely on the basis of the Government's allocation of time, but that you will select them in such a way that the House can see the range of amendments that could have been discussed had we been given the time.

Mr. Speaker: I assure the House that, in that respect, I shall do my duty.
The Clerk will now proceed to read the title of the private Bill set down for consideration this day.

Several Hon. Members: On a point of order, Mr. Speaker.

Mr. Speaker: I call Sir Patrick McNair-Wilson.

Several Hon. Members: rose——

British Railways Bill

Order for Second Reading read.

Sir Patrick McNair-Wilson: I beg to move, That the Bill be now read a Second time.

Several Hon. Members: rose——

Mr. Speaker: Order. I must ask hon. Members to resume their seats.

Mr. Dave Nellist: On a point of order, Mr. Speaker, on this Bill.

Mr. Speaker: On this Bill? All right.

Mr. Nellist: I am grateful to you, Mr. Speaker, as there was an obvious danger of at least two Opposition Members ending up with laryngitis before too long.
Will you confirm, Mr. Speaker, that the phrase, "business of the House" does not include private business such as the British Railways Bill? By definition, it is a Bill which affects a small section of the community, so it should not take precedence over a matter that affects the whole community. As you were railroaded or steamrollered by the Leader of the House, who bounced you into the position that you have held for the past 40 minutes, would it not be more appropriate if the business of the whole community—the poll tax—had a full hearing in place of that private business?

Mr. Speaker: Top marks for ingenuity, but the hon. Gentleman knows that we must get on with the Bill, which we should have started to discuss at 7 o'clock. It is only fair to those Members who have an interest in it.

Sir Patrick McNair-Wilson: I was endeavouring to say that the works in the Bill are designed to add to the capacity and improve the safety and reliability of the railway system. The shift to rail implicit in the schemes is good for the relief of congestion, for the environment and, ultimately, for the taxpayer. In many areas, British Rail is currently investing substantially in growth. It is perhaps worth remembering that the electrification of the east coast main line to Newcastle, Edinburgh and Carstairs which will take place in July this year will bring Edinburgh within four hours of London for the first time.
The Networker project is designed to bring more capacity on routes around London, particularly in Kent, with the first Networker 465 due to be delivered in September this year.
As for the channel tunnel link, it is fair to say that the expenditure of f1·4 billion on channel tunnel trains, stations, depots and track upgrading for 1993 is currently in hand. A massive investment in the regional railways is taking place so that all diesel trains that are over 30 years old can be replaced by 1992.
In the longer term, projects such as the InterCity 250 will reduce journey times to the north-west, the west midlands and Strathclyde and on the crossrail link in London.

Dr. Norman A. Godman: I am grateful to the hon. Gentleman for showing his characteristic courtesy in giving way. He mentioned improvements in the service to Strathclyde. As a Strathclyde Member, may I ask what confidence he has


that improvements will take place in the next year or so? I receive many complaints, particularly from business men and women passengers, that the service along the west coast of Scotland and England into Euston is massively inferior to the service between Edinburgh Waverley and London King's Cross.

Sir Patrick McNair-Wilson: I prefaced my remarks with "in the longer term". My earlier comments related to events that will happen this year and changes that will take place soon. I assure the hon. Gentleman that his remarks will be passed on to the chairman of British Rail, so he will be aware of the concern of the hon. Gentleman and his constituents about the services provided in that region. I have no doubt that the point will be carefully noted.

Mr. A. J. Beith: Before the hon. Gentleman leaves the issue of Anglo-Scottish services, may I say that many of us who have been keen to support the measures that he outlined a moment ago are worried that the undertaking that was given to us about the restoration of sleeper and overnight services was not maintained.
The hon. Gentleman referred to the new chairman of British Rail and those of us who are most concerned—my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel)—were especially grateful that the chairman has agreed to reconsider the matter. However, we attach importance to undertakings that are given when private Bills go through the House and wish to ensure that they are followed up as far as is humanly possible.

Sir Patrick McNair-Wilson: I understand that the hon. Member for Berwick-upon-Tweed (Mr. Beith) and his colleagues met the chairman of British Rail on 27 February and that an early response to his comments will be given to him. That is as far as I can go this evening, but I hope that it will satisfy the hon. Gentleman.
The Bill represents works in the shorter term and most of the projects command general support. There have been four petitioners against the Bill and the board hopes that it will be able to reach agreements with at least two of them before the Bill goes before a Select Committee.
The Bill follows the usual format for Bills of this type. Part I—clauses 1 to 4—is in line with past practice. Clause 1 deals with the short title; clause 2 deals with interpretation; clause 3 deals with incorporation of general enactments; and clause 4 deals with the application of part I of the Compulsory Purchase Act 1965.
Part II deals with the details of the works to be undertaken. Those are important because they allow British Rail to meet the increasing demand, both for additional passenger services and for freight services. I stress again that the transfer from road to rail is in everyone's interest. I shall outline the most important works, but if hon. Members have additional queries on matters to which I do not refer, I shall try to seek clarification for them.
It may be interesting to point out that many of the works are reinstatements of older works. Work No. 1 is the reinstatement of a chord line, half a mile long, at Guide Bridge in Greater Manchester. It will handle trainloads of stone for the construction industry and take them to various terminals north of Manchester. That will allow trains to run via Ashton Moss instead of the present route via Ashburys, which is undulating with severe curves. I

know that the hon. Member for Denton and Reddish (Mr. Bennett) is interested in that matter, but he is, unfortunately, not in his place.
Work No. 2 is a similar reinstatement of a curve at Edge Hill, Liverpool, to allow coal trains from Gladstone Dock to reach Fiddler's Ferry power station without the need to reverse at Edge Hill, saving time and fuel through improved efficiency.
Work No. 3 is the restoration of the rail link between St. Helens and St. Helens Junction on the Liverpool to Manchester railway. The line is now used in part as a freight siding and its restoration will allow the introduction of a new passenger service between St. Helens and Warrington, with a possible subsequent extension to Ellesmere Port. The proposal has the backing of the Merseyside passenger transport executive and will contribute to the relief of traffic congestion in the area.
Work No. 4 is a temporary diversion of the railway at Bingley to allow the construction of a bridge for the new Airedale trunk road. Works No. 5 and 6 allow the construction of two extra tracks on the western approach to Leeds station to handle the increasing number of passenger trains planned for the future with the West Yorkshire passenger transport executive. The scheme will help to improve reliability and relieve congestion in West Yorkshire.
Work No. 7 is to some extent connected with the future channel tunnel project. It provides for the closure of Willesborough level crossing at Ashford—a very busy crossing on the line to Dover and the channel tunnel—where delays to traffic are already severe. A new footbridge will be provided for pedestrians, and the nearby Crow Corner bridge will be widened to take the extra road traffic.
Work No. 8 involves a chord line at Clarborough near Gainsborough, which will allow coal trains from Immingham to reach Cottam power station direct, avoiding the need to run to Retford and reverse direction there.
Work No. 9 involves a long siding at Sherburn in Elmet, between Pontefract and York, to carry trains of gypsum from the Drax power station to the works of British Gypsum Limited. The flue gas desulphurisation plant at Drax produces gypsum as a by-product, and the link allows the heavy traffic to pass by rail rather than by heavy lorry.
Other works are related to the replacement of various levels crossings, and other clauses in the Bill relate to provision for underpinning buildings, dealing with surface water, agreements with highway authorities and so on. Two changes deal with level crossings over private roads, and provide for the normal penalties for disregarding flashing red lights that would apply if the crossings were over public roads. Clause 30 deals, among other things, with the extension of platforms at Strood station in Kent to allow longer Networker trains to be run, to increase capacity and reduce overcrowding on the busy north Kent route from Charing Cross and Cannon Street.
I realise that some hon. Members may be concerned about the works that relate to the moving of coal. Concerns have been expressed about the movement of imported coal, but that is clearly not a matter for British Rail. British Rail is in the business of moving goods and passengers, and I hope that the House will agree that it is far preferable for any product that has to be moved to be moved by rail rather than road. I hope that the House will


welcome the works that are proposed, which are modest and which will help to build on the shift from roads to railways.
The Bill is one of a number of measures—I have had the honour of being involved in many of them over the past 10 years—and I hope that the House will allow it to go to a Select Committee because it represents an essential building block for British Rail in its continuing attempt to build a more effective and reliable service. I hope that the difficulties of the past winter are behind us. The general thrust of the board's policy is to improve its facilities and its service to passengers and freight users, and the Bill is an essential part of that process.

Dr. Norman A. Godman: I have a deal of sympathy for the Bill and I listened carefully to the speech of the hon. Member for New Forest (Sir P. McNair-Wilson).
I want to refer to the Anglo-Scottish service. The hon. Gentleman courteously gave way twice. The first intervention concerned the sleeper service. In particular, concern was expressed about the trains stopping in Berwick-upon-Tweed. Two hon. Members use the service—the hon. Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend the Member for East Lothian (Mr. Home Robertson).
I speak as a long-term supporter of British Rail. As someone who travels between Glasgow Central and London Euston, I can speak as a consumer. As one who occasionally travels down by train, but—regrettably, the hon. Member for New Forest may say—much more frequently travels on the shuttle service between Glasgow airport and London Heathrow, I think that unquestionably the most civilised way to travel between the two cities is by train. There is no argument about that. It is much better to travel by train than to go through a crowded Heathrow and undertake the dreadful journey from there to Westminster tube station.
There has to be some equality as between the service that runs down the west coast of Scotland and the one that runs between Edinburgh Waverley and King's Cross. For a start, I think that I am right in saying that the Edinburgh Waverley to King's Cross service is much more frequent than the Glasgow Central to Euston run. Moreover, the latter is often served by old rolling stock. Two weeks ago, my wife and I went to board the Royal Scot leaving Euston for Glasgow at 10.25 am. Given that it is supposed to be the premier train of the daily service, the rolling stock was a disgrace. The buffet service, too, was nothing short of scandalous. If British Rail is to attract passengers—particularly business passengers and tourists—we shall need not only improved travelling times between Scotland and London but improvements in on-board services offered to passengers.
As a supporter—albeit a mildly critical one—of British Rail, I hope that the company will note what I am saying, because, as I said, rail is the better mode of passenger transport between Scotland and the south-east of England. Given that passengers are to be incarcerated for more than five hours, it is nothing short of disgraceful when, on

boarding a train at Glasgow Central, they are told that the buffet service is off or that no restaurant facilities are available.
Improvements are therefore required in addition to these welcome, if somewhat modest, changes and the promise of long-term changes. The hon. Member for New Forest talked about the 250 service, for example. If the train provides the kind of service that I should like to see, many Scots will be keen to travel on it.
Journey times need to be improved, as does the quality of service on board. I do not criticise the staff, who are extremely friendly and courteous, but they must be given the best facilities and resources to help them in their dealings with passengers.
If such criticisms were taken on board, I genuinely believe that there would be an increase in passenger travel on the Anglo-Scottish service.

Mr. Peter Snape: I want to make three extremely brief points about the Bill. The first—touched on by the hon. Member for New Forest (Sir P. McNair-Wilson), who moved the Second Reading in his customary able manner—concerns the moving of imported coal. Like other hon. Members, I am conscious of the contentious nature of any proposals to import coal into the United Kingdom. However, as the hon. Gentleman said, if imported coal is to be moved—and, once it is imported, it has to be moved—it is best moved by rail.
The proposals for the two chord lines at Edge Hill and Clarborough on the west and east coast respectively will keep a considerable number of heavy lorry movements off our roads. Moreover, I need hardly remind the House that if the Bill were defeated because of an objection to the moving of imported coal by rail, the coal could be moved by lorry without any reference whatever to our procedures. It is only because of our somewhat archaic way of dealing with British railways matters that we are discussing the proposals.
Secondly, I wish to record my pleasure about the restoration of the link between St. Helens and St. Helens Junction. It will provide a connection for Warrington, as well as connections for Birmingham and the west of England. If the extension goes ahead, there will be connections at Helsby for Chester and at Ellesmere Port for the electrified line serving the Wirral area. I am sure that the Merseyside passenger transport executive feels that such works will benefit the area.
My third point relates to the building of the chord line at Guide Bridge. My hon. Friend the Member for Denton and Reddish (Mr. Bennett) has previouusly raised that matter. We appear to be in some danger of causing further inconvenience to my hon. Friend's constituents. I hope that the hon. Member for New Forest will relay our concerns to British Rail. A number of years ago, the track was reduced to a single line just south-west of Denton station,and it stretches as far as Heaton Norris junction. The current proposals will result in an increased number of heavy trains having to wait before they can enter the single line section. Some 20 years ago there were four tracks between Denton and Heaton Norris junction, but now there is just one. I am sure that the hon. Gentleman will

 understand the problem of congestion that could and is so easily caused, especially at night when so many freight train movements take place.
Having made those three points, I welcome the Bill on behalf of the Opposition. I wish it a fair passage through the House.

The Minister for Roads and Traffic (Mr. Christopher Chope): The Government have considered the Bill and have no objection in principle to the powers sought by the railways board. We have no points outstanding as a Department. I hope that the House will give the Bill a Second Reading and allow it to proceed to Committee for detailed consideration in the usual way. I understand that there are four petitions against it.

Sir Patrick McNair-Wilson: With the leave of the House, Mr. Deputy Speaker, I shall deal first with the points raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman). I know Glasgow well as my father was a doctor there. The InterCity 250 service is designed ultimately to take 30 minutes off the journey time to London and to provide the sort of benefits to which the hon. Gentleman referred. The hon. Gentleman will be aware that, sadly, the time scale for the project does not envisage completion until 1994. I assure him that the project is on time.
The hon. Member for West Bromwich, East (Mr. Snape) and I have discussed railway Bills for a number of years. I welcome his support and his acknowledgement of the point about the movement of imported coal, on this occasion, and generally about trying to get freight off the roads. He properly raised the question of the chord line at Guide Bridge and the worries that that is causing the hon. Member for Denton and Reddish (Mr. Bennett). I have drawn the matter to the attention of the railways board, which was not entirely aware of the congestion. As of this evening, the matter will be re-examined. I hope that that reassures both hon. Members that the matter is now firmly under consideration.
I welcome the support of my hon. Friend the Minister. I hope that the House will allow the Bill to go to the Committee.

Question put and agreed to.

Bill accordingly read a Second time and committed.

House of Commons (Accommodation)

Motion made and Question proposed, That this House do now adjourn.—[Mr. Neil Hamilton.]

Mrs. Edwina Currie: I am glad to have this opportunity to raise the issue of House of Commons accommodation, with particular reference to phase 2 of the proposals before us. I made a new year's eve resolution. I gave a number of hours of thought to various matters, and then I came up with my resolution—to do whatever I could about the appalling conditions in which I and many others work in this House. It would have been a little selfish simply to demand that I be moved to something better, so I took the issue on board and did some research. I was absolutely amazed at what I found.
We have a little more time than usual for an Adjournment debate, so I shall begin by explaining that my office is in Commons court. It was built in the 1970s when my right hon. and noble Friend Lord Joseph was in charge, and I am told that that is why the lifts are so slow. I have to share my room, as do most of my colleagues. I share it with my hon. Friend the Member for Gosport (Mr. Viggers). Previously, I shared it with my hon. Friend the Member for Derby, North (Mr. Knight) until his appointment to the Whips' Office. I am told that he has considerable affection for the room and remembers it with pleasure.
I remember that room only in that I have been there for a very long time. I occupied it from 1983 to 1986 and from January 1989 to now—some five years of my life. I know every inch of that room, every knobble on the wall and every door knob. I know it far too well.
The first problem with the room is that it is not very big. According to the recent space audit, its official size is 12 sq m. It is a room for two, which gives me 6 sq m. We must also take into account the fact that a substantial amount of the room is taken up with two desks, three chairs, a bookcase, a cupboard and the various other implements and paraphernalia of two working colleagues. That does not leave a great deal of room.
My hon. Friend the Member for Derby, North and I made our point about the room at Christmas 1985 when we held a drinks party. We managed to get 22 people into the room, although most were standing on each other's shoulders and a number had their heads touching the ceiling. However, by the end of the drinks party we felt that we had made our point.
I want to give the House some idea of what that 6 sq m—precious little space—means. It is, of course, illegal and runs counter to the Health and Safety Executive rules, of which I am sure my hon. Friend the Minister is aware. I made some inquiries and discovered that one of the buildings on the nearby site that might be available to us all in some dim and distant future, well into the next century, is Canon row police station. Indeed, some of its accommodation is already used by staff of the House. It was built in 1902 and still includes the police cells, which I understand are of some historical significance. Each prisoner had not 6 sq m but 7 sq m in those police cells, so perhaps we would all be better housed if we made use of them.
The only advantage of my little room—almost my nun's cell—is that it is air conditioned, which I find helpful as I am an asthmatic. Of course, it is necessary that it


should be air conditioned because it has no other form of ventilation. It is an internal room with no windows and no natural light. In fact, it is a store cupboard, and it should be used as such. It should never, at any time, have been allocated for use by working people, and especially not by hon. Members. It should never have been permitted to be used by anybody. I suspect that it would not even be useful or appropriate for a photocopying machine or any machine that emitted vapours, and it is utterly unsuitable for humankind. To be absolutely honest, I suspect that I have one of the worst rooms in the Palace, although it has the advantage of being close to the Chamber, and I appreciate that.
I understand that in the recent space audit ordered by the Services Committee, it was established that some 230 hon. Members needed to be rehoused to ensure that each had a respectable, albeit small, room of their own. One third of hon. Members stand to be rehoused somehow. That does not include any further Members of the other place. I gather that most of them expressed no interest in acquiring any accommodation. That needs to be borne in mind. One third of hon. Members are inadequately housed and have to work in the sort of conditions that I have described—conditions that would be regarded with astonishment and disgust by our constituents.
The appalling conditions here make our work difficult. For example, yesterday I had two meetings with people from outside the House. One meeting included four constituents who wanted to join me in lobbying the Minister for Public Transport about improvement of our rail facilities in south Derbyshire. We had a successful meeting, but there was no way I could get them into my room. It would have been inappropriate and discourteous of me to ask my hon. Friend the Member for Gosport to move out so that two of them could come in. We tried to book a Committee Room but found, inevitably, that they were all booked—for some frightfully important meetings on the politics of other nations, I gather.

Mr. David Shaw: I do not know whther my hon. Friend has been able to ascertain why some of the small Committee Rooms are booked, but in the past year it has come to my attention that they have sometimes been booked for taking Members' photographs for television companies, or by outside companies and organisations with private Bills. The result is that my constituents have not been able to meet me in relative comfort because, as my hon. Friend points out, all hon. Members have rooms which are completely unsuitable for such meetings.

Mrs. Currie: I take my hon. Friend's point entirely. The fact is that there just are not enough rooms of any kind here. I suspect that many are occupied by extremely worthy Officers of the House, Departments, and so on.
To continue with yesterday's saga, our pre-meeting was eventually held in their Lordships' House, over tea in the Pugin Room. It is not easy mixing eclairs with plans and maps—they got in everyone's way and we ended up with sticky maps. The de-briefing had to take place much later in a corridor in Marsham street, waiting for taxis in the rain. It was a thoroughly unsatisfactory situation. How on earth are we to look after our constituents, or anyone else we might want to see, if the rooms are too small to get them into?
I had another meeting, in connection with tonight's Adjournment debate, with three distinguished gentlemen all of whom have had a finger in the pie that I am describing. I made them come to my room because that seemed the easiest way of making my point. One sat at my hon. Friend's desk, who fortunately was not there, one sat in the armchair and one sat on a footstool. Again, there was simply no room for the plans or drawings. Had we wished to use anything as elaborate as visual aids, such as slides or an overhead projector, it would have been impossible. One of us would have had to go into the corridor. None of that is conducive to intelligent conversation. With respect to the officials whom I met last night, I must say that in the circumstances they did rather well.
Added to all that, my marvellous secretary is stuck in another building. She shares a room, and her working conditions are Dickensian—absolutely antediluvian. There is no room for me to house a research assistant, should I wish to have one, so I have to resist all entreaties from the marvellous keen young people who would love to come to work for me or many other hon. Members. It is a good job we do not have the same leeway as the United States Congress, which I visited in 1989, where Congress members are restricted to no more than 17 assistants. If we introduced such a rule in this place, it would really put the cat among the pigeons.
It is tempting to believe—I am looking at my hon. Friend the Minister for Housing and Planning as I say this—that there is a conspiracy abroad to ensure that Back-Bench Members are prevented from doing their job properly. However, as my hon. Friend has spent a long time on the Back Benches, I am sure that he is not a party to it and that he will try to disabuse me of such a traitorous notion when he replies.
What can be done about this? Various efforts were made in the 1970s. For example, Norman Shaw North, where my secretary works, was occupied by the House in 1975 and much of it was restored to a respectable standard. Norman Shaw South was used by us from 1979. At about the same time, a great deal of work went into drawing up a scheme for the whole of the Whitehall, Bridge street, Canon row site—known as the Casson Conder proposal. It would have cost more than £100 million at 1979 prices and was rightly abandoned as almost one of the first things that the new Government did on taking office in 1979.
The trouble is that not much has happened since. There has been a great deal of talk and consultation, but precious little in the way of results. Throughout the 1980s, all that we managed to acquire was space for 30 secretaries, but not a scrap extra for hon. Members. In a Palace where about 2,000 people work, that is pathetic and I for one am losing patience.
I will go through some of the schemes. When the Casson Conder scheme was abandoned in 1979, the Department of the Environment commissioned three separate reports, one after the other, all designed to discover whether it was possible to marry private money and private effort with public money and public effort, and whether that would do the trick.
At last, in 1984, the phase 1 design brief was produced. Why it should take five years to get from a decision to a design brief I do not know, but I am not asking my hon. Friend the Minister to explain all the past decisions for which he does not have responsibility—I am simply


putting on record the mess that we have had until now. The contractor is Faircloughs and I gather that the cost of the scheme will be at least £30 million. It will house 60 Members and 100 secretaries. It should have been ready in 1990, but it was not.

Mr. David Shaw: Has it occurred to my hon. Friend that there is an imbalance between the number of Members and the number of secretaries? She said earlier that her secretary is in a separate building. My secretary is four floors beneath where I operate. That makes it impossible for there to he any computer networking whereby her computer can be connected to my computer or for us to be connected by any modern electronic work facilities. Is that not inconvenient for hon. Members and will not even the new building, costing what it does, perpetuate the existing shortcomings?

Mrs. Currie: We could probably have a long debate—and perhaps we will when my hon. Friend catches your eye, Mr. Speaker—about exactly what services should be available to Members. I think that we should have access to faxes and computer links. We should have closed circuit television. We should have a dish on the roof, and I have said so, so that we can receive the television services that our constituents receive. We should have a cable system, and the quicker the better. This place is still in the 19th century.
While I am complaining, I should add one word of considerable gratitude to whomever it was—it may have been the hon. Member for Ogmore (Mr. Powell)—who stole half the gents' loo in the Library Corridor and turned it into a nice ladies' room. The ladies of this House are extremely grateful.

Miss Emma Nicholson: Will my hon. Friend alert my hon. Friend the Member for Dover (Mr. Shaw) to the fact that the electronic mail system is not dependent on which floor one's secretary happens to be on or underneath? As a sexist comment, I would rather the two were reversed in any case.

Mrs. Currie: It depends whether one has a male secretary or a female secretary.

Mr. Ray Powell: I should like to correct the hon. Lady about the ladies' toilet. I was not aware that the gentlemen's toilets in the Library Corridor were to be halved until I returned from a break. With all due respect to lady Members, there are not so many lady Members as male Members. If they were to walk the other way down the corridor, there is a ladies' room that I did not know about until I was invited in to see it. It has a bathroom, a shower and a lovely lounge, as well as toilets, and it is only about 10 yards from the corner where the extra facilities have been provided, so I think they are surplus to requirements.

Mrs. Currie: Presumably the hon. Member for Ogmore was taken into that ladies' room by one of his hon. Friends. In fact, it is the Labour ladies' room, and we are only there when we are absolutely desperate. I am pleased that the subject has aroused such interest.
The most irritating thing that struck any lady Member coming to the House for the first time was that the door to the loo in the Library Corridor—the closest one to the Chamber going the usual way—had on it "Members only". There are many stories of lady Members going in

there and retreating in great embarrassment; of course, one or two did not retreat in embarrassment. However, the doors are now marked, "Lady Members only" and "Gentlemen Members only". Lady Members, at least on the Conservative side, regard that as a tremendous victory.
I have already mentioned that my hon. Friend the Member for Gosport shares the room that I am complaining about. He has put himself on record as saying that ladies need more room than gentlemen. I think that I should refer the hon. Member for Ogmore to my hon. Friend the Member for Gosport, who clearly knows more about the matter than I do.
To return to the design brief produced for phase 1 in 1984, we have seen the building and it looks magnificent. I gather that it has cost some £30 million and that it should have been ready in 1990. I was informed by the Clerk to the Select Committee that it would be ready during the summer recess this year. I asked about it again yesterday. The Department of the Environment assured me that it would be ready in October 1991. Occasionally we see the figure of a workman passing backwards and forwards in front of a naked light bulb. Sure as heck, it does not look ready to me. Perhaps my hon. Friend can enlighten us as to when that building will be handed over. Indeed, will it be before not the next general election but the one after? We would regard that, too, as a considerable victory.
In the interim, Canon row police station has been modestly refurbished, and in 1989 it was made available for 30 Members' secretaries. That is it. There was no other change during the whole of the 1980s, and there was no improvement in accommodation for Members.
In May 1989 things began to move at a slightly faster pace. The New Building Sub-Committee of the Select Committee on House of Commons (Services) appointed the architect, Michael Hopkins, to advise on the development of phase 2—that is, Bridge street, Palace chambers and St. Stephen's house. That is still only part of the site. There is another third, which is still a dump, before we get to Richmond house.
Mr. Hopkins had no sooner started work than the Department of Transport and London Underground announced, in July 1989, the extension to the Jubilee line, the replacement and modernisation of Westminster tube station with the new interchange for the Jubilee, District and Circle lines, and the digging up of the whole of Parliament square. When one thinks of the security problems of digging up Parliament square, one's heart turns over.
Quite rightly, hon. Members let out a howl of rage and the Services Committee and various other committees responded with equal anger. London Underground backed off, saying that digging up the centre of the square would no longer be necessary and that the new proposals would be £10 million cheaper. In its report of 14 February 1991, the Services Committee said at paragraph 13:
We are particularly pleased that London Underground now accepts that there is no need to use Parliament Square as a work-site, although we are surprised that the engineering solution now put forward was not investigated at a much earlier stage.
I would put it differently—it is a pity London Underground did not think of that in the first place, because we have had another year's delay while London Underground and everyone else have been flapping around, trying to work out how not to dig up the centre of Parliament square when they did not need to.
We find that two new private Bills are required to ensure that development of the Jubilee line can take place. I understand that those Bills are in Committee. I am on record already as being highly critical of the whole private Bill procedure in respect of docks, ports and railways. The procedure is a leftover not from the 19th century but from the 18th century.
I am privileged to have been selected to sit in Committee on the Planning and Compensation Bill. Back in the 18th century, the way promoters got private Bills through was to bribe everyone. That might have worked then, but—naturally—compensation clauses have no such role now and will have no such effect. The point is that we should not have to go through private Bill procedures which take years, which keep hon. Members in Committee for hours and days and months and years, and which end up subsidising the legal profession.
My hon. Friend the Member for Tatton (Mr. Hamilton), who is sitting on the Front Bench, chaired one private Bill Committee for two and a half years and grew grey in the service of the House. [Interruption.] It had nothing to do with his constituency—it was connected with King's Cross. The whole system is barmy, so I welcome the efforts of the Leader of the House, under pressure from many hon. Members on both sides, to get shot of the whole procedure and to use the planning system instead.
Although the private Bills in relation to London Transport are expected to complete their passage through the House, with Royal Assent expected in the summer of 1992, which is not very long given the saga of private Bill procedure, the architects for phase 2 have not yet been commissioned, and the whole complicated scheme is still at the feasibility study stage.
The Services Committee promised in September 1990 that the architects' brief would be ready for Easter—that is, next week—but we see no sign of it. I hope that the hon. Member for Ogmore will catch your eye, Mr. Speaker. He certainly has my permission to do so. We should like to know where the brief is and when it will be produced.
What we shall have on Thursday of this week is an exhibition, based on Mr. Hopkins' suggestions. The House will have an opportunity to examine them. I think that I have seen them. Certainly I saw quite a lot of interesting drawings and computer printouts last night. I hope that I have not broken any protocols of the House, but in order to speak with a little knowledge on the subject I took the opportunity to see Mr. Hopkins.
From what I saw, the proposals are splendid, and I hope that no one raises any spurious objections to them. I hope that no one comes up with something which is thought essential. It reminds me of the way we used to build hospitals, or end up not building them. Everyone was invited to make a contribution, plans were produced, everyone was invited to comment and all the comments were taken on board. Of course, they were always contradictory, so we had to go back and produce more briefs, more feasibility studies and more space audits, and there was more delay.

Mr. David Shaw: My hon. Friend has referred to various plans and ideas, and the developments of the past 10 years, which have provided new accommodation for just 30 secretaries and none for Members. Will she

consider what might have happened if the management of the House of Commons had been different and if we had had a chief executive, a proposal now being talked of? A chief executive would have had drive, energy and purpose, and his or her sole raison d'être would have been to ensure that the interests of Members were better looked after from an administrative point of view.

Mrs. Currie: I could not agree more. In fact, as I look at you, Mr. Speaker, with your experience and service to this House, it occurs to me that, much as we all regret your retirement at the end of this Parliament, you would be ideal as the chief executive. I agree with my hon. Friend that someone has to do it—someone who knows how the place works, and has a commitment and an affection for it and for all its foibles and quirks, someone who has in his head a brain and in his heart some sense. I commend that suggestion to the House.
However, it is not merely a question of delays at Services Committee level. There is a gap between the Property Services Agency, the Department of the Environment, our asperations and the Treasury. I understand that only £20 million is provided each year for all work on parliamentary buildings, for the entire Palace of Westminster—this magnificent national masterpiece.
Phase 2 will cost £60 million, which is believed to be phased over about three years and means a doubling of the budget. I understand that the DOE has not yet told the Treasury officially about that expenditure and will have to do so to get approval in principle to start design work. We are only a year away from Royal Assent and we have yet to tell the Treasury. I asked a question yesterday and was told that my hon. Friend the Minister, or one of his colleagues on the Front Bench, will write to the Chief Secretary to the Treasury "any time now". Really—when and when can we expect some sort of reply?
That means that no real action is possible until 1992. According to the Committee, demolition and re-build will take three years, although London Underground said—it was quoted in the Select Committee report of 14 February 1991—that it would take 53 months from Royal Assent. So it will be 1995 at the earliest before this additional accommodation will become available—12 years after I entered the House.

Mr. Ian Bruce: I wonder whether my hon. Friend has thought about the possibility that a good, economic way to ensure that less staff want to take up accommodation within the Palace of Westminster would be to tell hon. Members that they could either have an office for their staff in London or be given a higher allowance to accommodate their staff elsewhere? In South Dorset I pay for an office for two people out of my allowance and I have to pay extra for my telephone bills because I use the private telephone there rather than the free telephone service here. My hon. Friend might like to expand on that interesting idea.

Mrs. Currie: I do not wish to set out rules for the way in which colleagues on either side of the House work. My system, in a large constituency, is that four staff work for me. One of them must be here, because so many telephone calls come here, this is one of our addresses and there has to be someone here to open the mail. If I may give my hon. Friend the Member for Dorset, South (Mr. Bruce) a clue, in the weeks after I left the Government I received what might be called a rather enlarged postbag. We used to get


three postbags a day and it took eight hours to open the letters. We had to bring someone else in—a research assistant who works for another colleague—and pay him, on an hourly basis, to open them. It only occurred to us afterwards that we should have saved all the stamps. Much of that sort of mail comes here and it would be a burden on the Post Office staff if it had to be sent elsewhere.
Of the three other people who work for me, one works at her home in London and two work in my constituency. I keep them all incredibly busy.
I wish that the allowance would be increased and I have expressed that wish in the House. It is appalling that we are obliged to pay our staff pathetically low rates, whether here or in our constituencies, because we would otherwise have to subsidise their pay substantially out of our own pockets.

Mr. David Shaw: One of the questions that seems to follow from that is that, while we might all want to restrict staff in central London—a policy suggested by Governments in the past and by the Greater London council in its day—considering the amount of legislation that passes through the House, which now amounts to about 40 Bills a year, together with European legislation, is it not reasonable that we might begin to approach the staff level that Congressmen employ, although we would be a long way short of that? Sooner or later each of us will need to have some sort of legislative assistant, who will probably spend a large amount of time helping us to keep track of the details of European legislation.

Mrs. Currie: I invite my hon. Friend to join us tomorrow in European Standing Committee A, where we deal with an extraordinary range of subjects week by week—European Standing Committee B meets at the same time—as he would find that his point is well made. If we are to keep up with all that, as many of us sincerely try to do, a little help must be on the cards at some stage. However, I always find that when I take on a research assistant I end up doing a lot of the work, especially if it is a young person. I end up looking after them, rather than them looking after me, so I have tended to reject that approach.
Since we have a fair amount of time for this Adjournment debate, I am more than content for colleagues from both sides of the House to comment if they wish to catch your eye at some stage, Mr. Speaker. We may as well use this opportunity to make the arguments that we want to make. We do not often get such a chance, and I for one am making the most of it.

Mr. David Nicholson: I am sorry that I missed the earlier part of my hon. Friend's speech. While I have been in the Chamber, she has been talking about accommodation for Members and the staff we employ. Are there not two other aspects to that debate? Since we have time, they should be explored further.
First, hon. Members receive a fair number of visitors from our constituencies or elsewhere. At present, we have to meet them in Central Lobby. Sometimes we can take them into some of the corridors. If we are lucky, we can buy them a cup of tea or coffee downstairs in the cafeteria. Accommodation, especially for confidential talks with constituents or visitors, is very limited. If 40 hon. Members each decided to give one constituent a drink in the Pugin Room or coffee in the cafeteria, that would be it—they would be packed. My hon. Friend should perhaps explore that subject.
The second matter that my hon. Friend might care to explore—as an indication of my admiration for her, may I say that I am sure that this must have occurred to her—is that, from time to time, hon. Members have to give television interviews, perhaps on days such as today when we have heard the Budget statement. At the moment we usually have to stand on one of the greens—Palace green, College green or outside the Queen Elizabeth II conference centre. Our lives have been affected by security measures taken since January and the outbreak of the war in the Gulf. Yet we are sitting ducks for terrorist attack, or any other attack, while we are giving television interviews. Should not the plans that we are making for accommodation in the House take account of hon. Members' security when giving television interviews? Would my hon. Friend care to develop that issue?

Mrs. Currie: May I answer my hon. Friend in reverse order? I agree that it is not an affectation or a conceit to ask that accommodation be made availble which is suitable for television studios. We are often required to give interviews—typically, one is asked to do so at some stage every week—and it is not merely Ministers but also Back Benchers. We think that that is a good idea. My hon. Friend's argument about security was well made. The studios available for such interviews are tiny—much too small for group discussions and only suitable for head-to-camera commentary. That is not satisfactory.
In his first comment, my hon. Friend reiterated what I said in my earliest remarks today. Perhaps he may like to do as I do: I show our rooms to those constituents whom I trust most deeply and especially local journalists whom I trust absolutely, and never again do they believe that we do not work hard. From then on they believe that we work in the most diabolical conditions, and they tend to admire us that much more whenever we manage to get anything done for them which requires us to sit down and write a letter, dictate a draft, or whatever.

Mr. David Hinchliffe: We do work in diabolical conditions, and I concur with the hon. Lady's central point. The essence of her argument is about the new building and the need for expansion. Is not the key issue the use of existing premises? I spent three and a half years—courtesy of my hon. Friend the Member for Ogmore (Mr. Powell)—in the Cloisters. I recently escaped and now share a room with another Member, which is positive luxury. I question the way in which the House has organised itself around bars and restaurants, of which I believe we have 21, or probably more. Do we need them? Would it not make more appropriate use of the establishment to convert the bars and restaurants into offices for hon. Members? Like the hon. lady, I regularly take my constituents down to the Cloisters for them to see the appalling conditions in which we work. They do not believe the conditions in which I worked for three and a half years. Should we not examine our use of existing premises before we consider the new proposals?

Mrs. Currie: I have known the hon. Gentleman for a long time and have had many late-night debates with him. We have 23 bars and restaurants. He will understand if I say with great affection that if I want to find him, I know where to look. Because of the way we work, we need facilities for refreshments—literally for refreshment even if it is beans on toast or whatever the Prime Minister eats these days, because we are here at strange hours. It would


not be safe for my colleagues—such as my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson)—to wander the streets around Victoria at 2 am to find something to eat. We might find more than we bargained for. We must have facilities on the premises.
When I first entered the House I, too, had a desk in the Cloisters, which I shared with 15 colleagues. What bothered me most was the absolute lack of privacy. Although I trusted my colleagues, I was bothered by the fact that on my wedding anniversary, which is on 1 July, when my husband sent me a bouquet of red roses the gossip columnists immediately wanted to know who had sent me roses. They were not satisfied with the explanation that it was a chap to whom I had been married for rather a long time. That is what lack of privacy does.
On a serious point, the wise space audit carried out by the Services Committee produced a response from only about 10 per cent. of hon. Members. Most of us bear some responsibility for our poor accommodation because we tend not to moan about it at the right time or in the right way. I have undertaken a lot of correspondence about that and I hope that my points have been taken seriously.

Mr. David Shaw: rose——

Mrs. Currie: I have been speaking for 40 minutes and I should like to make some progress.
This debate is on phase 2 accommodation and I should like to concentrate a little more on that. Phase 1 will provide space for 60 hon. Members and 100 secretaries. I am not sure about phase 2 because it depends on the feasibility study.
I contrast phase 2 with a building that is under construction in my constituency. The Toyota motor corporation announced in January 1989 that it was looking for a site. It made a decision in April 1989 and then obtained planning permission and compulsory purchase orders. A public inquiry took place and work started on the site in June 1990. At the end of October this year—not "perhaps", but for certain—the building will be finished and handed over to the company by Laing, the contractor. That is just two and a half years from decision to completion. The factory will cost £200 million, not £20 million or £60 million. The entire project will cost about £700 million, which is more than 10 times the cost of phase 2, but it will be completed in half the time. If there is an argument for the abolition of the Property Services Agency, that is it. If a company from overseas, which has never been to this country before, can build a new factory to time—in fact, slightly ahead of time—I fail to see why we, with our familiarity with and knowledge of every nook and cranny of these buildings, should take so long.
It never used to matter that we had no accommodation. Hon. Members would attend to their private concerns in the morning, stroll in for Question Time at half-past two and perhaps even do a little debating before toddling off to their clubs in the evening. One or two colleagues probably still do that. In those days, there were very few letters to deal with. Constituents were delighted to see the Member of Parliament about once a year, when the town band and the mayor in a top-hat would turn up at the railway halt to welcome him on his annual visit—it was always a he—but it is no longer like that, especially since the advent of television in the House.
I do not serve a handful of electors—I serve 83,000, covering an area of 120 square miles of south Derbyshire. I receive about 200 letters and other items of mail a week—that is in a normal week, when I am not busy doing something controversial. Most of my constituents have a telephone and use it, and many—more every week—have a fax and use that too. They all expect and deserve prompt, courteous and efficient responses and methods of handling what they want me to do—and so long as I represent the people of south Derbyshire, they will get it.
Please, could I have some more room in which to do my job properly, and as quickly as possible?

Mr. Ray Powell: It is a pleasure to reply to the hon. Member for Derbyshire, South (Mrs. Currie). Clearly, she has been better briefed by the civil servants than I, as the Chairman of the New Building Sub-Committee, have been. I shall take that up with them in due course. I hope that there has been no briefing over and above what the Services Committee has already received, because you for one, Mr. Speaker, would soon be telling members of Select Committees that they should not disclose information until it has been reported to the House. The hon. Lady was no doubt able to acquire much information as a result of her experience as a Minister. I am reluctant to put egg on her face—to coin a phrase—but her criticism is unjustified, especially when one considers the history of the new building in phase 1, in particular, and the distinguished Members who served on the Committee to get it established.
The hon. Lady was elected to the House in 1983 and was a PPS to the Secretary of State for Education and Science in 1985–86, with all the perks that that might have afforded her. After three years in the House, she became Under-Secretary of State for Social Security in 1986. No doubt she then had spacious accommodation and plenty of secretaries and plenty of help to open her sacks of letters.

Mrs. Currie: The only privilege or perk of being PPS to Lord Joseph was the honour of serving such a marvellous and distinguished man of whom I am very fond. Our rooms were no better. As for my time as a Minister, my room was then in the Star Chamber. The only advantage was that I did not have to share it, but it was roughly the same size as the room that I have now.

Mr. Powell: That remark surprises me. I have been to most Ministers' rooms in the House and they seem spacious to me. The hon. Lady must have been very unsuccessful in the allocation of accommodation.

Mr. Bob Cryer: She is an ex-Minister.

Mr. Powell: Yes, she is an ex-Minister. The hon. Lady has especially overlooked the problems of Back Benchers. She is now born again as a Back Bencher and she has found out the difficulties that we face. As a Back Bencher myself, I face them.
The hon. Lady referred to the delays. I do not know whether she is listening. She opened this Adjournment debate and I should have thought that she would be interested to hear the answers to the problems. Perhaps she knows them already. When she referred to the delays, she, above all, should have recognised the service of hon. Members who have served on the New Building


Sub-Committee. A design brief for phase I was accepted in 1984 under the excellent chairmanship of the late John Silkin, who spent many hours on the design brief and who had to cope with the difficulties of negotiating the funding of the project with Ministers. As an ex-Minister, the hon. Lady will know that getting the funding, even for Parliament itself, is far more difficult than designing the building or getting it built.
In November 1987, the New Building Sub-Committee was set up. I put on record my appreciation of all the hon. Members who constantly attended meetings not once every three months, or once every month, but every Tuesday. The purpose of the exercise was to get on with the building. All hon. Members who have served on the Sub-Committee since 1987 have been regular attenders despite their other onerous duties. Some of them, for example, have been Whips. Recognition of their devotion to the project and to the development of phase 2 should be placed on the record. I have had the privilege to be the Chairman of the Committee. Only as a result of the efforts of the Committee shall we see phase 1 being developed and allocated to hon. Members this summer. Hon. Members will be given accommodation there when we return in October after the summer recess. That is undoubtedly wholly due to the efforts that members of the Sub-Committee have put into the project.
The Sub-Committee has produced four reports since 1987. The first deals with the reasons for the delay on phase 1. I am rather surprised to find that the hon. Lady was not in the Chamber during the debate on that report to make the comments that she has made now. Perhaps she was busy then as a Minister. We have twice presented reports to the House on the Jubilee line proposal, which delayed the development of phase 2 and could have delayed further development of phase 1. We presented the fourth report on the phase 2 proposals.
You, Mr. Speaker, and the Commission engaged Sir Robin Ibbs who produced an excellent report for the House on all accommodation. I put on record the fact that Sir Robin enjoyed the job. However, although he enjoyed coming to the House and making his report, he was not paid for his services. Sir Robin is a busy man. He gave his time and energy to prepare the report, with the help of all the staff in the House, and it will be useful as a source of reference not only for the New Building Sub-Committee, but for other Committees of the House. I am sure that everyone in the House would want to pay tribute to him and to his committee for their efforts.
I am aware that the Minister for Housing and Planning may reply to the debate and I do not want to take the ground from under him. However, I want to explain what I think the next steps should be.

Mr. Don Dixon: The Minister was a member of the Committee.

Mr. Powell: Yes, the Minister was a member of the Committee.
I fully understand the hon. Lady's impatience with the slow rate of progress to date—indeed, I and my colleagues fully share that impatience. I hope that we can now make more rapid progress. Most hon. Members will be aware that phase I will open during the forthcoming summer recess. The infuriating delays that have bedevilled the work on site now seem to be over. We can look forward to moving into a splendid building. It will provide 160 extra

desks for hon. Members and their staff. There will be new catering facilities, major new accommodation for the Library and much more besides. Many new offices for Members will be provided within the Palace as a result of other hon. Members moving into phase 1. I understand that about 95 places will become available within the accommodation of the House.
You will recall, Mr. Speaker, the time when we discovered that there were 25 rooms above your spacious accommodation in the Speaker's House. They will become available as a result of your inquisitiveness to find out what was going on above your head.

Mrs. Currie: My ears are pricking. Are we given to understand that the rooms above the Speaker's House will be available to hon. Members? If so, may I put my name down?

Mr. Dixon: Yes to the first question, no to the second.

Mr. Powell: My hon. Friend the Member for Jarrow (Mr. Dixon) said that the answer to the first question was yes and the answer to the second was no. The Accommodation and Administration Sub-Committee examined the matter and said that the accommodation should be only for hon. Members because it was above the Speaker's House. You, Mr. Speaker, would not want a cabaret going on upstairs while you where trying to sleep. The rooms were found and the New Building Sub-Committee, the Accommodation and Administration Sub-Committee and the Select Committee on House of Commons (Services) made arrangements to provide access to them. They will eventually come on stream for new hon. Members.
The problems were not only finding the rooms and organising the space audit, which the Committee pressurised everyone to complete. Thanks to the Serjeant at Arms and his staff, the accommodation audit was carried out, although it took some months. It may interest the hon. Lady to know that it is the first space audit of the Palace of Westminster since it was built. At least our weekly meetings are turning up much accommodation that might otherwise have been overlooked.
As for phase 2, much has been happening behind the scenes. In two reports to the House over the past 12 months, the Services Committee has described complicated negotiations with London Underground Limited about the future of the Bridge street site. That has taken up much of the Committee's time since the Government presented the Jubilee line scheme two years ago. The latest proposals represent an excellent deal for the House. The plan to dig up Parliament square and use it as a work site for five years has been dropped, largely because of pressure from the New Building Sub-Committee. The Government have promised that funds will be forthcoming for a concrete raft to separate the London Underground works from the parliamentary works.
That crucial decision will enable us to erect a high-quality building, shielded from the noise and vibration of the tube trains that make working in the existing buildings so unpleasant. I used to share an office in St. Stephen's house with my hon. Friend the Member for Jarrow; it was all right when the trains were not moving, but once they started we had to move with them, even if we were writing at the time. The design of the phase


2 building will no doubt benefit from the fact that the architect Michael Hopkins will be responsible for it, and also for that of the new tube station.
Having been initially blown off course by the rather half-baked proposals of London Underground, we are now in a position to co-operate with the company in the development of a finer building than would otherwise have been possible. Perhaps the two-year delay will benefit Parliament: the building above the concrete raft will include five floors which will stretch right across the raft, rather than the original design around the perimeter of Bridge street.
Over the past 12 months, the New Building Sub-Committee has been very active. We have commissioned the first thorough survey of parliamentary accommodation—the so-called audit—which consists of a computerised data base that will enable future accommodation to be planned on a rational and objective basis. The space audit has told us how much space we currently have, how it is to be used and how much of the present accommodation is unfit for its purpose.
The hon. Member for Derbyshire, South mentioned the Cloisters. I spent some time there. A number of hon. Members who were elected in 1979 were allocated no desks and no offices—not even any space in the Cloisters. We were left to wander the corridors. I remember, Mr. Speaker, asking your predecessor, in 1980, to implement the shops and factories Acts. He said that, although hon. Members passed Acts of Parliament, the law did not cover them. We could not demand the implementation of the law for the benefit of Members of Parliament or their secretaries, because we are a law unto ourselves. We had to beg or borrow a space, sometimes using the desks that were available in the Library and sometimes finding that no desk or chair was available even there.
When I was responsible for allocating accommodation to Labour Members, I offered a desk in the Oratory Room to a new Member in 1987. I told him that it could give him a great deal of publicity, because Charles I's death warrant had been signed in that room. He might appear on the front page of his local newspaper. "May I see the room?" he asked. "Of course," I replied, and I took him down to see it. "Very nice," he said. "I accept; thank you very much." Accordingly, he moved in and was given the expected publicity. He showed me the story on the front page of his local paper, explaining how he had been allocated a space in that historic room. What he did not realise was that three other hon. Members would be joining him in a week or two. He would come to regret having accepted the offer. Thankfully, things are changing now, and it is to be hoped that in the not-too-distant future there will be accommodation for all hon. Members.
I have written to all hon. Members asking for their views on which extra facilities are most acutely needed in the phase 2 building. I have received replies from just under 10 per cent. of my colleagues.
We have also received bids for accommodation from the various organisations and departments represented in the House. On the basis of all that information we have put together a package of proposals for phase 2. The Services Committee will announce its decision in a report to the House which we hope will be published shortly after the Easter recess. You would not expect me, Mr. Speaker, to

divulge the contents of a Select Committee's report in advance of its publication. I can only say, wait and see. If, however, our proposals are adopted, we shall be able to achieve the Services Committee's target so that by the time phase 2 is completed, every hon. Member who wants an office shall have one and the overall standard of accommodation for Members of Parliament and their staff will be greatly increased. We hope that then we shall be able to demolish unsightly temporary accommodation such as Portakabins and find new uses for what is at present unsuitable accommodation within the estate. Moreover, we hope to be able to accept the great majority of the bids for phase 2 accommodation.
On Thursday of this week we are to hold an exhibition in Committee Room 7 from 11 am to 5 pm. It will not publicise the Services Committee's final recommendations because they have not yet been reported to the House, but the exhibition will display the current thinking of our architects and give some idea of what might be available in phase 2. The architects ought to be given credit for the advice that they have given not only on phase 2 but on phase 1. If hon. Members take the trouble on Thursday to visit the exhibition, I am sure that they will be suitably impressed. We hope that as many Members of Parliament and staff of the House as possible will see the exhibition.
Once the Services Committee has reported, it will be up to the Government to ensure that progress is maintained. We hope for early acceptance by the Treasury that funding should be made available for phase 2. Our architects can then begin the design work in earnest. Construction work could begin as soon as the London Underground Bill receives Royal Assent—possibly in about 12 months' time. If the political will of Ministers is there for phase 2, it could be completed within three or four years. My Sub-Committee will do its best to ensure that that timetable is achieved.
I could speak at length, but I realise that other hon. Members want to take part in the debate. The chances are that they will want another debate on this important subject. It is an emotive one for those without accommodation. The members of the Services Committee and I are sympathetic. Those of us who now have an office of our own have not always enjoyed one. We appreciate, therefore, the restrictions imposed on certain Members and their staff and believe that proper accommodation ought to be provided for them. It should be possible for them to hold committee meetings in their offices, at which four or five other people could be accommodated. Their secretaries ought to be able to work alongside them. Members ought not to have to walk two or three miles to contact their secretaries. It is high time that Parliament spent money on designing a building in which appropriate facilities are made available for Members of Parliament.
I should like a swimming pool to be provided, as well as accommodation for school children when they visit the House. That would enable us to educate youngsters about parliamentary democracy. Such accommodation is willingly provided in other countries. Other Parliaments pay for visits by school children. Facilities are made available for them so that they can listen to debates. It is essential that this Parliament should provide similar facilities.
The aim of the New Building Sub-Committee and of hon. Members on the Service Committee is, with the


blessing of your Commission, Mr. Speaker, to make progress on the design of phase 2 and to provide accommodation for hon. Members.

Mr. David Shaw: I am grateful to the hon. Member for Ogmore (Mr. Powell) for speaking in this interesting debate, and I congratulate my hon. Friend the Member for Derbyshire, South (Mrs. Currie) on obtaining it. The hon. Gentleman made a relevant point when he said that, in due course, every hon. Member should have an office, our visitors should be better treated and we should have the facility of Committee Rooms in which we can hold meetings. Those three things would go a long way towards ensuring that the House and its Members are pre-eminent in the world in terms of debate and in maintaining our leadership of many years as the mother of Parliaments and as one of the leading Parliaments, if not the leading one, of the world.
However, we must focus on whether the hon. Gentleman's objectives will be met and consider what pressure we must keep up to ensure that they are met. In the short time that I have been a Member of the House, I have learnt that, unless we keep up the pressure, bureaucracy all too often gets in the way and the administrative procedures ensure either that things do not happen or that objectives take an unduly long period to achieve.
I was elected after working in business and industry, and although I acknowledge that one wants to embrace and quickly take on board many of our traditions that go back hundreds of years, the tradition of poor facilities is not one that we should maintain. It has had its day. There was a time when it was a bit of a joke. There was a time when one could go to one's constituents and say, with a bit of a laugh, "Aren't the conditions that we work in appalling? Aren't you fortunate that we can deal with your mail, get answers out of Ministers for you and have the arrangements for all that?" There were times when hon. Members were proud of the fact that they could use a desk in the Library and did not need a secretary because they could write all their constituency mail by hand.
However, those times are in the past. We live in a competitive world and in a market economy, although not all hon. Members welcome that. In this competitive world, other Parliaments might begin to compete with the mother of Parliaments in the skills of debate and in terms of what facilities they can offer their Members. We need to stay on top of the many issues that need discussion today. This Parliament over the years has discussed issues that relate to many countries. I remind hon. Members of the debates on the Gulf and of the amount of information that was needed when making decisions about weaponry and equipment. All hon. Members suddenly wanted to get to grips with that information.
We also encounter pressures from the media. Because of what is happening in the world today, we are instantly required to be experts on a wide variety of subjects. The days when one could lock oneself away and be an expert only on health or on defence or on any other individual subject have now gone. We must ensure that we have access to a lot of information, and to that end we need not only technology and its facilities available in our own offices, but better facilities for our staff, who should also have access to that information.
It is annoying to find that, although Government Departments issue press releases almost daily on various subjects that interest me or my constituents, I do not yet have the facilities to search a database and to find out what information was released today or yesterday. Instead, one has to telephone the Department and check with the civil servants. That means delay and an inconvenience that is compounded when one has only a limited number of staff and has to carry out much of the research oneself.
However, all those facilities are increasingly available to the outside companies that lobby us. It is infuriating to attend a lobbying company function and to find that its staff are much more on top of the subject and have much more information at their fingertips than is available to hon. Members. When I go to meetings, I want to be able to ask my secretary or a member of my staff to press the buttons on the machine and obtain access to all the relevant information to ensure that I am properly briefed, as I would be if I were in business. When I was in business, information was made available in one way or another.
When I visit colleagues with whom I used to work when I was in business and see their offices and the facilities which my former employers now provide for their staff, I am appalled at how the House of Commons is falling behind day by day and minute by minute in an environment where the electronic age is pushing everything in the outside world that much further forward and at a much faster pace. We must keep up and get on top. If not, the fears of my colleagues that the European Parliament and other parliaments in Europe will move ahead will be realised, because other parliaments will be able to move information and databases forward.

Mrs. Currie: Will my hon. Friend join me in putting on record our appreciation of the House of Commons Library, and its research assistants and staff? They are absolutely first class. Will he add the press to his list of outside organisations that are much better informed on a day-to-day basis than we are? Does he agree that it is astonishing that the most efficient way of finding out what is going on in our constituencies is to phone our local newspapers?

Mr. Shaw: I could not agree more with my hon. Friend on the latter point. It is particularly frustrating when a media organisation gets on the telephone to one and says, "Please can we have a quote on … " It may be some subject on which the Ministry has just made the latest announcement or, dare I say, leaked what is to be announced later in the day. One does not have a clue that the announcement was even to be made. There is nothing on a televison screen to tell us.
The other frustrating thing is that, when we are over here in the main Parliament building, we cannot contact our offices except by telephone. We have secretaries working away typing letters, and it would be wonderful if we could go to a computer screen in the Library and go through our secretaries' work on a link line to our offices, which are some yards away. That would be especially useful when voting is taking place.
I also agree with my hon. Friend the Member for Derbyshire, South about the House of Commons Library. We have tremendous access to information and support from the House of Commons Library, but is that resource being used in a sensible way? If I step back and look at the matter almost as a management consultant would, I notice


that we have some talented people in the Library who should often be used for intellectual research and the product of the research rather than for our mundane inquiries. Sometimes such people have to deal with our mundane inquiries because we do not have access in our offices to basic computer searching facilities to enable us to search databases ourselves.
The office programme should be designed to enable us to compete with the outside business world, the people who lobby us, the media, and the European Parliament. We must keep the British Parliament ahead of the field. We want this Parliament to continue to be a centre for intellectual debate which is ahead of the field and the rest of the world.
In the few years that I have been in Parliament, I have had visitors from the eastern bloc, several Soviet republics and the United States. They were all full of admiration for the intellectual debate which goes on in this Parliament and the way in which we have stayed ahead of the field over the years. But they would be shocked if they knew that we were likely to fall behind them as they developed. They will have the advantage of developing with all the new technology. They will take on all the latest facilities. They will ensure that any new buildings in their Parliaments are wired with the latest optical fibres and other technologies which will enable them to keep ahead. It is important that we should keep ahead in intellectual debate.
We should keep ahead in representing democracy and in making sure that Parliament does more to encourage visitors. A number of hon. Members have mentioned schoolchildren and others visiting the Palace of Westminster. It is essential that we have adequate facilities and that we can offer people refreshments. Visitors from my local disabled groups have come to Westminster. I was quite impressed by our facilities for the disabled, but there are no facilities for giving a cup of tea afterwards to people who have gone around the House of Commons in their wheelchairs. Here they are, having struggled round the building and enjoyed their visit, unable to sit down and have refreshments at the end.
Nor do we have enough Committee or other rooms in which to meet people when we cannot leave the House because of debates. We must have more meeting facilities.
As a new Member, I have been rather fortunate in securing an office in Norman Shaw, North, because it is one of our better buildings and has better office provision. Yet the carpets are a little dowdy, there is dust and goodness knows how many little bugs which have been floating around for years, and one feels that there has never been a breath of fresh air in the building for some time. The paintwork is not regularly renewed. It does not give the impression of being a working environment in a modern age.
There is also a tremendous waste of space which will have to be addressed at some stage: neither the corridors nor the arrangement of the building are very modern. There is also a central courtyard which is a total waste of space. It may be that the outside of the building must be preserved for architectural reasons, but there are many buildings in the City of London whose centres have been modernised; the offices are open-plan, and an atrium and airy, light spaces have been introduced. The natural

lighting in the Norman Shaw, North offices is appalling, and we rely on neon lighting which in many offices today might be questioned as being bad for the eyes.
When I read of office stress and strain and all the other conditions which are being investigated these days by the private sector, I feel that our staff are getting a raw deal, because it will be a long time before we can offer them the sort of health protection that is offered by the private sector. We must address these subjects. We cannot go on having debates and discussions like this in the year 2000 and beyond. It is just not good enough to continue for that length of time without doing something about these things.
I have mentioned in outline information facilities and access to databases, networking systems and other such things. We must accept the truth of the old saying "Information is power". I am not a great one for the conspiracy theory, but it has been suggested to me that it applies here—that it suits the Government to keep hon. Members in the dark, to keep them away from some of the information facilities and to deny them access to some of the modern technology which will enable us to get up speed and be able to compete with Government and Ministers on what is happening in the world outside, and will ensure that questions and debate in the Chamber are of the highest possible standard and quality.
I would suggest to any Minister who might be tempted down that path that it is in the interests of us all, whether in government or out of it, to have the highest possible standard of debate in the Chamber, to make sure that, when foreign visitors come here, they will still feel that the British Parliament is the leading parliament in the world and will continue to be so.
That is why we must make sure that we have complete access to all the information facilities now available, whether commercial, Government or departmental databases. The most modern facilities should be available in the offices of the future that hon. Members will occupy.
The internal mail facilities in this building need examining. It is wonderful for us to have at our disposal the services of the great British Post Office. All the traditions of that great institution are brought to bear as our mail is cared for. I understand that certain aspects of Mr. Speaker's mail receive special attention, but we are hidebound with tradition, even in such modern matters as the mail, and a special stamp must be affixed to all envelopes that appear on the Members' letter board. I accept that many of these facilities have style and have existed for many years.
When I visit a friend in Congress in the United States, I see that his mail is delivered each morning to his personal letter box at the door of his office. His secretary does not have to queue at the Congress post office for his letters. Our secretaries make a detour—it can take up to 20 minutes—going to our post office and queueing for our mail. Consider the time, not just in money, wasted by our secretaries undertaking such activities, when they should be answering queries from our constituents and dealing with administrative and other matters. I urge the authorities of the House to examine our internal mail arrangements, at least in the hope that the mail can be delivered directly to our secretaries' desks and offices.
We must review the maintenance and decoration of public buildings, new and old, in an aggressive way. The trouble with Government accounting, for the schools and hospitals in our constituencies and so on—I speak as an accountant who worked in the private sector, and my


remarks apply to all Government buildings, including the Palace of Westminster—is that proper provision is not made for maintenance and depreciation because we do so much on a cash accounting rather than on an accruals accounting basis. The result is that, when the time comes for cash to be spent on maintenance and repairs, we discover that there is something better to spend it on, that the country cannot afford it, or that public expenditure is too tight at that time for the money to be spent in that way.
Our public buildings must be regularly decorated. Curtains in our offices should be taken down at least annually and properly cleaned to remove the dust and modern bugs that scientists seem to be discovering almost weekly. Only by those means shall we ensure that we and our staff work in a healthy environment. That may lead us in the future to be more efficient and productive. It will also help to keep this place in the forefront of the world's parliament buildings.

Mr. David Harris: I am happy to speak after my hon. Friend the Member for Dover (Mr. Shaw), and I begin where he left off, on the important issue of the general appearance of this place. Hon. Members will not forget their first visit to this building. I was a young lad up from the west country who sat in the public gallery and looked round in wonderment. My local MP asked me to join him for tea, but I was too shy to accept. I was left with the impression of a building in marvellous condition. I speak of the time not long after it was rebuilt following the blitz. The stairways, for example, were in excellent condition, whereas my hon. Friend the Member for Dover was right to say that it is now in places decidedly grotty.
This debate provides a valuable opportunity for those who care deeply about this building and institution—of course, the institution is wider than the building—to review the state of affairs here, and we are grateful to my hon. Friend the Member for Derbyshire, South (Mrs. Currie) for initiating the debate. I am particularly grateful to the hon. Member for Ogmore (Mr. Powell), the Chairman of the New Building Sub-Committee, for the difficult work that the Committee does. I thank him for bringing us up to date on the plans for stage 2. We hope that the opening of stage 1 is imminent.
We can all be critical. My hon. Friend the Member for Derbyshire, South was critical of the length of time that it takes to get anything done in this place. The parliamentary estate—what a horrible expression—is one of the most sensitive areas in the whole of London. No one knows better than you, Mr. Speaker, that nobody can do anything here without consulting many people. A great number of people are involved in the work, and many bodies outside—not least, English Heritage—are very concerned about any alteration, however small. There are all sorts of restraints and contraints on the work of improving the lot of the thousands of people who work—indeed, almost live—in these buildings.
One thinks, above all, of the malevolent influence and attitude of the Treasury from time to time. I am sure that you, Mr. Speaker, like me, remember the very ambitious plans that were produced many years ago for the site we are now discussing. I think that the building was called the bird-cage because of its aviary-type top. We all remember how, one Budget day, the Chancellor of the Exchequer

killed that project at a stroke. The Government of the day had to cut public expenditure, and the bad conditions in which Members of Parliament had to work continued.
Tributes have been paid to the many people who have done their best to improve our conditions. I crave your indulgence, Mr. Speaker, to pay a tribute—one with which the House will want to be associated—to my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), who, in his year or so as Leader of the House of Commons, did his utmost to improve conditions. I had the pleasure of being my right hon. and learned Friend's Parliamentary Private Secretary. Having made that very swift transition one July day from the Foreign Office to this building, the Leader of the House decided, in his usual thorough manner, to go on a very extensive tour. We went to Old Palace Yard and to St. Stephen's house, which is still rattled by the trains. I have fond memories of the reaction of the hon. Member for Ogmore. My right hon. and learned Friend was absolutely shocked at the conditions in which some members of our staff, particularly secretaries, work. The conditions really are appalling. Perhaps I may enter a plea for my secretary, who still works in St. Stephen's house. I hope that she will get accommodation in phase 1 of the new building, which should open after the summer recess. I do not make any special plea for myself.
Harsh words have been said about conditions in the Cloisters. When I became a Member of Parliament I asked that I should be allowed to go to the Cloisters. I have spent 27 or 28 years here. The first 19 years were spent in the Press Gallery, and for the remainder, after service in the European Parliament, I have been a Member. Having decided that I wanted to go to the Cloisters, I sought out the good Miss Frampton, who will be remembered well, and put my request to her. The request was granted. Of course, that place would not be everybody's choice. Unlike my hon. Friend the Member for Derbyshire, South, I was not sent red roses.
I am sure that my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson), who also has a desk in the Cloisters, will bear me out when I say that they have one merit above all others—their convenience for getting to the Chamber. One could hardly be nearer the Chamber. Admittedly, other Members sometimes speak rather loudly—not, I hasten to add, my hon. Friend the Member for Torridge and Devon, West, whose desk is two down from mine—and there is certainly no privacy, but the place has a certain charm and I should be happy to spend the rest of my parliamentary life there.
The new building will relieve some of the pressure for space, so I make a plea that when it comes into service we be given a little more space in the Cloisters, which are after all no more than a converted corridor. Given a little more space, I shall be perfectly happy to stay there.
Hon. Members have mentioned other people who work in this building and the conditions in which they have their being—our secretaries, for instance. I should like to mention the Press Gallery. The number of journalists working there has exploded in recent years, because of the televising of the House, local radio and the general growth of the lobby. Numbers have increased dramatically since I arrived in the gallery in 1961. It has tripled in size, and that has put pressure on press refreshment facilities and especially on the writing rooms. People are jammed in, and


their position has not been eased by the advent of the new technology which was much lauded by my hon. Friend the Member for Dover.
Speaking of my hon. Friend the Member for Dover, I should add that databases, computers and all the machines that I have no intention of ever mastering are doubtless important to some hon. Members. The fact is that we all want something different from the House of Commons and the services that it provides. So I was glad to read in the third report of the Select Committee on House of Commons (Services), prepared by the Sub-Committee presided over by the hon. Member for Ogmore, the following sentence. Referring to the space audit about which the hon. Member for Ogmore enlightened us, it said:
We are not seeking to establish a single uniform standard of accommodation.
That is right and proper. We all want different sorts of accommodation. Many of us are perfectly happy in the Cloisters; others have different requirements.
My hon. Friend the Member for Derbyshire, South is one of those who need more space, privacy and staff. No doubt she has research assistants. I do not want one—they are anathema to me. But I am not criticising my hon. Friend——

Mrs. Currie: I hear what my hon. Friend says and I agree with it, apart from two points. First, there ought to be some minimum standards here which are at least related to the laws that affect the rest of the nation. Secondly, I should like not just more room and space but a window.

Mr. Harris: I am sure that my hon. Friend will have a window, if not more space. She is right of course. The Select Committee report went on to say:
We do however think it desirable to establish a basic minimum standard which, if approved by the House, could become the bench mark for future planning"—
the very point made by my hon. Friend the Member for Derbyshire, South.
I treasure the memory of my former colleague, Enoch Powell, sitting at a desk in the Library answering his correspondence with a dipped pen. Some colleagues still do that and there should be a place for it. Perhaps some of them use fountain or ball-point pen—a method eschewed by my former colleague. Equally, there should be a place for the needs and aspirations of Members. For example, my hon. Friend the Member for Dover is into computers, word processors and all that fancy equipment in a big way. The House should try to accommodate Members' different styles of working.
One of the fascinating aspects of this place is that there is no set way to approach the remarkable job of being a Member of Parliament. No one, thank goodness, has tried to produce a manual on it. We all work differently, according to our upbringing, training and constituencies. The pressure on Members varies according to whether we are full time—I do not criticise those who are not. The strength of the House is its diversity, but that produces problems for those who manage and run it.
During my five years as a Member of the European Parliament, my colleagues and I had offices that we refused to occupy because we felt that the Mayor of Strasbourg, Pierre Pflimlin, was attemping to cement the European Parliament to Strasbourg. A great building was

constructed there, without parliamentary approval, and made available to us. The offices contained a shower and a couch and were quite palatial, but I was there for only one week a month. My office would have made most Members of this House green with envy, but I hope that we shall never reach that position here.
I not only cherish the memory of Enoch Powell working in the Library, but when I go there I delight in seeing some of my colleagues still working there—often by choice—because that is the way it should be. We do not want uniformity but better standards, especially for our staff and those of our colleagues who require them. We want better facilities for the many people who serve the House and work in it, perhaps not directly for Members of Parliament.
Some Opposition Members have made the case on behalf of the catering staff. They have described the conditions in which they must work and the paucity of their rest facilities. They work terrifically long hours, especially when the House sits late, and deserve proper facilities.
The debate has been well worth while. I hope that it will spur on all those who have been wrestling with the accommodation problem for many years to make even greater efforts. My hon. Friend the Member for Derbyshire, South is right to say that we should make faster progress, but we are getting there. Some of us are happy to be self-sacrificing and say, "You have your fine office. We are content with ours in the crowded Cloisters".

Miss Emma Nicholson: It is difficult for Parliament to get it right, not only because of the differing needs and views expressed by my hon. Friends the Members for St. Ives (Mr. Harris), who sits in front of me in the Cloisters, and for Derbyshire, South (Mrs. Currie), but also because it is a question of housing. It is perhaps appropriate that my hon. Friend the Minister for Housing and Planning will answer the debate. I say that quite seriously. I was recently in Romania, where, as we know, the dictator, the Parliament and all the authorities built themselves truly massive palaces, which would doubtless fulfil all the requirements of the endless reports that have been produced about services in this place. But when I went to Romania, I was ashamed that the people had not turned all the palaces into houses for the poor immediately after the revolution. In terms of civilisation and care of our own people, we are a million miles from Romania. Nevertheless, I believe that there is a point to be made.
I understand that we are already the most expensive Parliament in the world, and we sit the longest hours by far. The next Parliament down the list sits only half the hours that we do and the next one down, half the hours again. We are enormously expensive in terms of staff. I have worked in many areas of the world, in many different offices and in countries with different cultures and styles of economy. Never in my life have I been as well looked after personally as I am here. In my working experience, the service that we receive from all the staff, with their different responsibilities, titles and tasks, is truly unique.
There is simply nothing like it anywhere else. We talk about Congress. The messengers in Congress are youngsters—dressed up and running around. I am amazed that they ever arrive. Presumably it is only their keenness


and enthusiasm that get them there. How far removed they are from the stately dignity of our highly intelligent badge messengers. When one hears our messengers talking about the very framework of the building, as they do each morning, one realises their great knowledge and love of the Palace of Westminster.
The hon. Member for Ogmore (Mr. Powell) referred to catering facilities. Never in my life have I been able to walk into any one of a number of restaurants and cafeterias at my place of work at 3 am and get the sort of breakfast I want.
This is a truly remarkable place. Would that all the library facilities in the United Kingdom could match the level of service that we are offered. I am proud that I can sit in the Library and do my work on behalf of my constituents. The facilities are truly remarkable, not just because of the intelligence of those who serve us from behind the counters, but because of the enormously varied service that they provide, ranging from providing us with daily or weekly papers to bringing to us any book that we care to name. The service is unique in the United Kingdom.
My hon. Friend the Member for St. Ives referred to our desks in the Cloisters, but failed to mention one important point. It is true that we sit in a passage and that it is sometimes difficult. The police walk through, reminding us to vote, and that is a helpful service, but everyone else also seems to walk through, including secretaries and colleagues. Nevertheless, it is an extraordinary feeling when one looks up at the vaulted ceiling in the middle of the night and remembers that, with the exception of Westminster hall, the Cloisters are perhaps the oldest part of the House—the passageway through which Princess Elizabeth walked when she was concerned about the possibility of her sister executing her. This is an historic place, of truly great proportions both physically and because of its uniqueness.
I heartily support and praise the way in which the building has been adapted in an extraordinary variety of ways to meet some of the needs of a modern Member of Parliament. In the Cloisters, my hon. Friend and I have no privacy for our telephone calls. My desk is still labelled "Enoch Powell". I sometimes wonder exactly who I am. I took out the "Iain Macleod" label. It was a toss-up as to which eminent former Member of Parliament I should attempt to copy. Perhaps it was Mr. Macleod, who I knew the better of the two, and whose philosophy I probably share.
It is tough that we cannot have a private telephone conversation. It is difficult to have a tiny desk that cannot hope to contain the amount of mail that pours to us through the Post Office three, four or five times a day. However, in that old Cloisters, that historic place, there is the knowledge that we are just part of a long procession of Members of Parliament serving the United Kingdom.

Mrs. Currie: I am intrigued by the fact that my hon. Friend's desk in the Cloisters has Enoch Powell's name on it. Her experience is similar to that of my hon. Friend the Member for Epping Forest (Mr. Norris), who was at school with me in Liverpool. On one occasion he found that the schooldesk that he was sitting at had carved on its lid the name "Arthur Askey".
Does my hon. Friend think that perhaps the appalling working conditions in the Cloisters could be one reason why that distinguished gentleman Mr. Powell was driven

to work in the Library? It is certainly something that drove me to work in the Library. Unfortunately, there are nowhere near enough desks in the Library to accommodate colleagues who find that they cannot work in peace or concentrate in places such as the Cloisters, which is a corridor and a public thoroughfare.

Miss Nicholson: There is a benefit in working in such a cramped environment—the sense of comradeship and community. We are all battling against the same difficulties of volume in the modern world. [Interruption.] Over and above that, it enables us to concentrate in such environments as this Chamber at the moment, when hon. Members are attempting to thwart my speech. They are talking despite the importance of the topic. In a word, it teaches one concentration—and that art is highly prized in commerce and industry outside this place.
I wonder whether we are aware—despite, or perhaps because of, the slowness of change—how much conditions have imnproved in this place over the past 25 years. I understand that before my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) became Prime Minister, the only stamped envelopes that Members of Parliament were allowed to use were for destinations within the Greater London area. Those with constituencies in Cornwall or Devon had to pay for their postage.
Lest that sounds trivial to the electorate, I shall remind the House of an interesting statistic. Some 30 years ago, before this place became engulfed in such a volume of mail, the general public wrote to their Members of Parliament only a fraction of the number of times that they do now. Then, only 3 per cent. of the electorate wrote to their Members of Parliament in any one year; now, the figure has risen to 63 per cent. That explains why we have such great difficulty in coping with the volume of mail. That is not my imagination; it is actuality. Alas, it is the fault of our good friend the word processor, on which my hon. Friend the Member for St. Ives commented when he responded to the speech of my hon. Friend the Member for Dover (Mr. Shaw).
However we view the problem, we must come back to the central question of cost. This is a very expensive Palace of Westminster. We demand and acquire more services. We are looked after better and better and at greater and greater expense. The high cost of running the mother of Parliaments has put hon. Members off the sensible and sane plans which have been brought before the House but not implemented.
Cost is one of the real difficulties, and I believe that there should be some self-discipline and budgetary control in the mother of Parliaments. If we are to indulge ourselves by providing more accommodation for hon. Members or their staff—I heartily endorse the latter—there is a case for our looking more closely at our high expenditure. I hope that that will lead my right hon. Friend the Leader of the House to examine with a much fiercer eye the number of hours we work. Is it honestly necessary for the mother of Parliaments to sit so much longer than Congress which, alas, has so much more regard, resources and responsibility than we have?
I hope that my hon. Friend the Minister will suggest to my right hon. Friend the Leader of the House that, while it is splendid that he should look at ways of enlarging our comfort and ease, we should look at how the budget balances and try to restrict some of our already large expenses.
Other things matter as well. Health and safety have already been mentioned. It is a fact that, while others honour our health and safety legislation, the House of Commons does not have to do so. We pass the legislation, but we do not honour it. That is not a meritorious attitude. If we pass such legislation, we should honour it. I did not find it at all surprising that the first major case of salmonella which was egg-induced arose in the other place.
When one sees the desperately limited facilities that are available to the catering staff, one is astounded at the high-quality food and drink that they manage to turn out. The high standard they achieve is very creditable, given the difficulties under which they work.
I love to go downstairs and sit in the Members' cafeteria. The engraving on the wall there shows that it is very little different from what it was 200 or 300 years ago. It is fascinating to see the similarity, but the sensitivity with which we approach food today and the safety that we require surely mean that we should give our catering staff a better place in which to work than they have at the moment.
Facilities for the disabled is a subject that is close to all our hearts. I am fortunate enough to be chairman of ADAPT. It took us a long time to work out what ADAPT could be made to mean because we needed the word so very badly. It stands for Access for Disabled People to Arts Premises Today. It is the child of the Carnegie trust—that great trust which is perhaps the grandfather of all trusts in the United Kingdom. It was founded by Andrew Carnegie, who went to the United States of America and made his fortune in steel and railways. He set up an enormous trust in the United States and then came back and set up a more modest trust in Scotland. Out of his generosity came the building of most of our libraries, not the most modern ones but the Victorian libraries in all areas of the United Kingdom.
The Carnegie trust has not rested on those achievements. It is one of the quietest, most effective and largest trusts for good. It works on the same lines as the Rowntree trust and similar trusts. It created the body of which I have the honour to be chairman——

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Boswell.]

Miss Nicholson: Half the board of ADAPT is composed of people with profound disabilities. It makes decisions affecting arts premises and public libraries. What do we mean by arts premises? We mean cinemas, theatres, museums and all sorts of places where the public go for entertainment.
It is an appalling thing to say, but the only way for a disabled person in, for example, London to have a good night out with dignity is to stay at home in front of the television set. Therefore, the advisory committee of ADAPT had much work to do. Our task is to provide grant aid to stimulate the adaptation of cinemas, theatres, picture galleries, and public libraries as quickly and effectively as we can, by putting in induction loops for those with problems of hearing, by helping with Braille signing for those who are blind, and by putting in ramps and mechanisms for people whose main form of

locomotion is not their legs but a pair of wheels. In that way, we help disabled people to have a happy night out with dignity. That is the function of ADAPT.
Like many hon. Members, I am involved in many charitable endeavours. All of us are in different ways as Members of Parliament. Many people ask me to be patron or chairman of voluntary bodies. I have accepted as many as possible, on the basis that when something is important we can have an occasional meeting here. In the case of ADAPT, having meetings here is a non-starter. Despite the best efforts of all our courteous, efficient staff, it is not possible to have even quarterly committee meetings here if most of the members of a committee are heavily disabled.
I know the difficulties of dealing with grade 1, treble-starred, listed buildings, or unique buildings such as the Palace of Westminster, but is it proper that the mother of Parliaments cannot without enormous problems welcome someone in a wheelchair? If someone in a wheelchair is coming here, the Member who has invited that person has to say, "Do not come to St. Stephen's entrance."
People in wheelchairs cannot come in by the normal way. They can come in without going through security. Because they are in wheelchairs they have to go round the back, to the entrance used by post office vans. Such people have to be met personally by the Member who has invited them. They have to be escorted to the lift and up to the principal floor as if they were criminals. Last week, 13 people died on the M4; a number were injured and some of them may end up in wheelchairs. Those people will suddenly realise that, as far as Parliament is concerned, they are on the other side of the fence, they are different. We ensure that that difference shows.
I have had to give up holding ADAPT board meetings in the mother of Parliaments, despite the fact that in our first year of office we have raised and spent more than £1 million on adapting buildings all around the United Kingdom. It is not open to me to adapt Parliament or to offer handicapped people an honest and honourable way in.
I believe most strongly that the mother of Parliaments should not discriminate. Our colour, background or physical and mental ability should not stop us from coming here and meeting our Member for Parliament. It should not stop disabled people from attending an ordinary meeting, even taking into consideration the problems that the rest of us face when meeting our constituents in the mother of Parliaments; yet it does.
Last week, the ADAPT board and I met representatives of the Royal Albert hall. I invited them here. We have offered the Royal Albert hall a rolling programme to alter the hall so that it can never again be said that it has 6,000 seats and only four places for wheelchairs. That is a great project to undertake, but what has happened? Because we had our meeting here, one of our brave ADAPT board members had to come here. We met in Committee Room 17, and to my humiliation, because of the enormous number of chairs there, our committee member had such difficulty getting in and out that she was seen not as the fascinating, interesting and highly intellectual woman that she is, but as an invalid—as someone different, someone in a wheelchair.
I know that the mother of Parliaments will always be imperfect in many ways, and perhaps it is for her imperfections that those of us who are fortunate enough to


be Members of this place love her so dearly. It is an honour and a joy for all of us to work here. I love the Palace of Westminster, and I believe that we all do.
None the less—with a proper bow both to modernity, as it is represented by the enormously hard-working hon. Member for Derbyshire, South, and to historic associations, in the different ability to work under pressure, demonstrated so superbly to me every day by my nearest colleague in the Cloisters, the hon. Member for St. Ives—please may we make enough progress to be able to offer a meeting so that a disabled person in a wheelchair may come here with dignity, or to offer our staff somewhere to work with a little privacy and greater comfort? We are fortunate to work here. Let us try to do a little better and to tackle with haste and urgency the problem highlighted by this debate.

Mr. Cryer: On a point of order, Madam Deputy Speaker. As you are aware, I applied for a second Adjournment debate and the Department of the Environment agreed to provide a Minister, providing that the first debate was concluded. The matter is quite clear.
My subject was the poll tax, which was very appropriate in view of the announcement today. In my view, although it was clearly in order, the Tory Whips have deliberately brought in speakers to spin out time and to prevent a debate on the poll tax.

Madam Deputy Speaker (Miss Betty Boothroyd): As the hon. Gentleman has so rightly said, the debate that we are proceeding with is perfectly in order.

The Minister for Housing and Planning (Sir George Young): We have had a useful debate, initiated by my hon. Friend the Member for Derbyshire, South (Mrs. Currie), in which hon. Members from both sides of the House have taken part.
Today's proceedings have covered two parliamentary institutions—first, the Budget and then a debate about the fabric of Parliament itself. Both debates have been about money and about priorities.
My hon. Friend the Member for Derbyshire, South fulfilled her new year's resolution to take up the question of accommodation, not just for hon. Members but for their staff and others who work in the building. The House is grateful to her for the opportunity to debate a subject which has not been debated since December 1988. The debate has been wide ranging and some of the subjects raised do not fall within my responsibility—for example, questions of food, the hours during which Parliament sits, the mail and many others.
Some of the issues raised by my hon. Friend the Member for Derbyshire, South are covered by the New Building Sub-Committee and we are grateful to the hon. Member for Ogmore (Mr. Powell) for bringing the House up to date on the Sub-Committee's deliberations and the progress that it has made towards phase 2, about which my hon. Friend the Member for Derbyshire, South feels strongly—and rightly so.
During the debate, the difference of approach of many hon. Members towards their work has become clear. My hon. Friend the Member for Dover (Mr. Shaw) is clearly plugged into every new device of information technology, whereas my hon. Friend the Member for St. Ives (Mr.

Harris) is perfectly happy to work in the Cloisters. As many hon. Members have said, it is important not to impose a standard form of working.
When I recently returned to the Whips' Office and took with me my electric letter opener, an answering machine and a desktop printer, one or two members of the office regarded it all as highly dangerous. They regard a propelling pencil as a concession to technology and believe that one should go no further. We must remember that hon. Members discharge their obligations in different ways and we must respect their different approaches.
I was interested in the intervention of my hon. Friend the Member for Dorset, South (Mr. Bruce) who said that it might be easier if hon. Members were given the opportunity to—as it were—opt out. They could forgo their claim to accommodation in this building either for themselves or for their secretaries, or both, in return for an enhanced allowance which would enable them to provide accommodation in their constituencies. Since I entered the House, one of the changes that I have noticed is in the number of hon. Members who have a highly developed operation in their constituencies. The allowances do not always cover that—telephone calls and other overheads must be met out of the allowance whereas, if the Members were based here, those costs would be covered by the House. I was interested in the idea that there could be a trade-off—perhaps we need not provide so much accommodation in the Palace at great cost if more Members were prepared to relocate their operations outside. However, that is not a matter for the Government. It is a personal observation from someone who has no secretary here and who makes very few claims on the facilities.
I endorse the kind words—which were echoed by many other hon. Members—of my hon. Friend the Member for Derbyshire, South in commending the many people who have worked so hard to improve the facilities available to hon. Members and to their staff. The hon. Member for Ogmore and his colleagues on the New Building Sub-Committee have laboured for many hours on behalf of colleagues to secure improvements. It was suggested that hon. Members themselves have a role to play in organising themselves and the premises more effectively.
I remember the approach taken by Walter Harrison, who used to put a note on the desks of those whom he suspected did not use them frequently, saying, "Please ring my office at once." If no telephone call had been made within a few days, that desk was confiscated and allocated to someone who would make better use of it. I think that it was his successor, the hon. Member for Wakefield (Mr. Hinchliffe), who said that we should consider how we operate in the House and how to make better use of existing facilities.
The right hon. Member for Salford, East (Mr. Orme) and his colleagues on the Accommodation and Administration Sub-Committee are another hard-working group. I understand that it was the right hon. Gentleman—with active encouragement from my hon. Friend the Member for Billericay (Mrs. Gorman)—who secured the transformation in the Library corridor, which was referred to at the beginning of the debate. Part of a Members' cloakroom was converted for use by lady Members. The Sub-Committee has many other achievements to its name and has contributed significantly to improvements in


accommodation. Its achievements often go unsung except when it has the temerity to seek to make changes that involve man's best friend.
Another role is played by staff, such as Committee Clerks, the Serjeant at Arms Department and the Parliamentary Works Office. All of them have a role to play in maintaining our facilities and in putting forward proposals for better facilities.
Considerable strides have been made in the past 10 years. None the less, my hon. Friend the Member for Derbyshire, South was right to point out that Members, their staff and the staff of the House often have to work in less than satisfactory conditions. I have noticed how many Ministers who have rooms here have allocated their rooms to their secretaries because they are ashamed of the facilities that those secretaries would otherwise have. That is a clear comment on priorities and expectations.
Hon. Members can and do make their views known, and they have been doing that for the past two hours. Staff do not have the same opportunity. It is right to pay tribute to their contribution to the running of the House, often in trying circumstances, and to their forbearance. I assure them that their needs are being taken fully into account in the development plans.
One cannot accuse the House of not having given careful thought to its needs and one cannot accuse Governments of either party of rushing into solutions. The first mention of using Bridge street as a site for hon. Members was in a debate in March 1960. Lord John Hope, the Minister of Works, announced:
The Government have decided to apply for designation for Government development of the area bounded by Bridge Street, Whitehall, New Scotland Yard and the Embankment.
He then said prophetically:
As the House knows, that is bound to take a bit of time".
He was proved wrong when he said:
I believe hon. Members, on the whole, would feel that it is not a good thing for Members to go over to Bridge Street."—[Official Report, 31 March 1960; Vol. 620, c. 1527–28.]
It was seen as suitable for those who did not need to be on the spot. Even though the perspective has changed, the need to maximise the number of Members' offices within the Palace is still the aim of the House.
Barbara Castle, now Lady Castle, led for the Opposition in that debate. The only hon. Member who spoke then who is still in the House is the right hon. Member for Chesterfield (Mr. Benn). Rab Butler closed the debate as Leader of the House. He mentioned that there were only 124 Members' secretaries' desks and that there was no waiting list. As a Minister, he announced that he had ordered an extra 25 filing cabinets for Members. In a plebiscite for the Stokes committee, only 295 Members said that they wanted a desk. A Minister had recently said that one telephone per desk was over-egging the pudding. In addition to the Bridge street site, a number of other schemes were also under consideration. There was a suggestion that the Palace should be completed as Barry had intended by entirely enclosing New Palace Yard with an extension from the Clock Tower to the St. Stephen's entrance. There was a proposal to use the roof spaces and to infill the courtyards.
As a result of that debate, in the 1960s and the 1970s, the north and south Upper Committee Corridors, the Star Chamber Court block and the tea room block in

Commons Court have all been used to provide additional accommodation. The Barry extension, surrounding New Palace Yard, proved too controversial.
There were major acquisitions in the 1970s, such as Norman Shaw North and South, which accommodates almost 150 Members, the Library and 200 secretaries' desks. The development of Bridge street has been less encouraging. A number of plans have come to naught, to which my hon. Friend the Member for Derbyshire, South and other hon. Members referred. The House will recall the design with which Spence and Webster won the competition for a new parliamentary building, which was abandoned in 1976. There were plans by Sir William Holford in the early 1960s, by Sir Leslie Martin for the whole of the Whitehall area in the mid-1960s and the Casson Conder comprehensive proposals which were abandoned in 1979, as my hon. Friend the Member for Derbyshire, South said.
Although 1979 saw the cancellation of the then latest scheme for improving accommodation for Members and staff, and was the cause of more delay, it could in retrospect be seen as a watershed. Instead of large-scale developments causing major demands on the public purse, we have gone forward since then in smaller bites. As a result, we have achieved more in the 1980s on the site than in the whole of the previous 20 years.
It may be appropriate to mention the important role played by my right hon. Friend the Member for Henley (Mr. Heseltine). He achieved that sea change in 1979, and pushed through phase 1 of the redevelopment. It is appropriate that he is back at the Department to do the same for phase 2.
The first of the recent major improvements was 1 Canon row, occupied in summer 1989. Although it was refurbished only for short-term use pending redevelopment as part of the Bridge street project, it none the less provided some worthwhile gains, accommodating 30 Members' secretaries, providing training accommodation for the Official Report and bringing together the staff of the Parliamentary Works Office. Better police accommodation has been provided, as—most recently—has an improved gymnasium, for which tribute should be paid to my hon. Friend the Member for Dorset, West (Sir J. Spicer).
There were also consequential gains in the Palace. The leader of the Liberal Democrats—who do not seem to be represented in this debate—gained a much larger suite of offices, and additional Members' offices were built on the official corridor, off the Strangers' Gallery and on the ground floor—about 10 in all. That may not seem a lot, but it is at least significant.
My hon. Friend the Member for Derbyshire, South rightly mentioned the progress—and lack of progress—with Bridge street phase 1. The contract was let in May 1987 and work started in the following month for completion in May 1990. The new accommodation should have been available for occupation at the end of the summer recess last year, but it is a matter of history that that did not happen. The Services Committee commented that the lack of progress was
a sorry commentary on the state of the building industry",
and I tend to share that view, but there will be other occasions for a post mortem; perhaps tonight we can look forward.
The fine building that emerged from the scaffolding is now clearly visible. I do not know whether my hon. Friend


has been around the building, but it is well worth a visit. I was enormously impressed by the way in which the work had been carried out and by the high standard of finish. It will, I think, be a very attractive proposition for hon. Members who locate there.
It is equally obvious that the work is now coming to an end. The main contractors' senior managers have said that the contract will be completed by Easter, which is less than two weeks away. There is still some major snagging work to be completed and a good deal of effort is going into that. I hope that on this occasion the House will not he disappointed.
I know that the New Building Sub-Committee is keeping a close eye on developments. It will visit the site shortly after Easter to confirm that the forecast has been fulfilled, as will I. If the target is achieved, moves into the building will start at the time of the spring bank holiday, and should be completed by the end of the summer recess. The building will provide accommodation for 100 Members' secretaries and 60 Members, a cafeteria seating 150 for the use of both Members and staff, a Library for all those north of Bridge street and residences for senior staff, as well as overnight sleeping accommodation.
The benefits, however, will be enjoyed not only by those who move into the new building. There will be less overcrowding in existing Members' offices, less pressure on the catering facilities in the Palace, improved Library facilities and better offices for staff. My hon. Friend the Member for St. Ives suggested that there might be less congestion in the Cloisters. That is a matter for the usual channels, but I am sure that his suggestions will be taken on board.
The vacated residences of the Serjeant at Arms, the Deputy Serjeant and the Speaker's Secretary are all to become Members' offices. It will also be possible to bring into use the derelict area above the Speaker's Secretary's residence, which will mean further gains for Members. Following phase I and the consequentials, 112 secretaries and 127 Members will gain desks. My hon. Friend the Member for Derbyshire, South, will need to put her case as persuasively as she can to my right hon. Friend the Chief Whip, whose responsibility this is—patronage: that is real power! Even those who do not succeed in obtaining one of the new rooms should at least find that their existing rooms are less crowded. Those changes should all be completed early in the new year.
Not only will Members gain; particular attention has been paid to the Refreshment Department, which was mentioned by my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson). It is acknowledged that there is a serious problem there. Additional accommodation has been allocated on the ground floor of the Palace: that will be used for lockers and changing rooms this year, while long-term plans are developed in conjunction with the Catering Sub-Committee. The Administration Department will also gain significantly more space this year in Dean's Yard to help overcome the present shortage.
My hon. Friend the Member for Derbyshire, South expressed concern about the speed at which phase 2 has been developed. Hon. Members in all parts of the House agree that the accommodation ought to be provided quickly. The Services Committee produced its report—"New Parliamentary Building (Phase 2). The Next Steps"—which we debated about two years ago. The report recommended that consultants should be appointed to

carry out preliminary design work on New Palace Chambers, to identify suitable uses for Nos. 1 and 2 Bridge street and to undertake a feasibility study of the proposed Bridge street subway.
Following a fee-bidding exercise, Michael Hopkins and Partners was appointed in 1989. Both the House and the Department have appointed an eminent architect. My hon. Friend the Member for Derbyshire, South perhaps knows the cutlery factory that the company designed for David Mellor—not my right hon. and learned Friend the Member for Putney (Mr. Mellor)—at Hathersage. It won a Royal Institute of British Architects Award in 1989. Already we have firm evidence of Mr. Hopkins's foresight. In addition to undertaking the three particular studies, he was asked whether he could undertake a sharp, short look at the total site. That proved invaluable when, shortly afterwards, London Underground announced its intention to extend the Jubilee line with a new station on the phase 2 site.
The phase 2 site is the last opportunity to provide purpose-made accommodation in a new building close to the House. It is important, therefore, to know in detail what is needed. I am sure that the hon. Member for Ogmore listened to what my hon. Friend the Member for Derbyshire, South said about facilities for the disabled. In addition to what can be supplied in phase 2, I understand that further improvements are about to be put to the Accommodation and Administration Sub-Committee to improve facilities in the Palace.
It was agreed that the Sub-Committee should undertake what has become known as the space audit. It looked at existing accommodation—particularly offices—to assess both the needs and the shortfall. It involved a thorough review of all the existing accommodation. It is the first time that there has been a qualitative and quantitative assessment. It found that between 210 and 230 offices were needed for Members and for an equivalent number of staff.
It would be wrong to prejudge the views of the Services Committee on the proposals, but I understand that they have been generally well received. These recommendations, together with bids from departments of the House, form the basis of the proposed brief which will be available for hon. Members to consider on 21 March in Committee Room 7. I urge all hon. Members to visit the room. Initially, only about 60 hon. Members responded to the request made by the hon. Member for Ogmore for proposals.
What is the next step? The Services Committee will produce a final brief soon after the Easter recess. That is obviously another important stage. Then we shall have in place the site, the architect and the requirement, after which we shall be able to put forward a coherent set of proposals to the Treasury. We shall be seeking agreement in principle to funds amounting to some £60 million. At a time when we are urging everyone to provide value for money and to look carefully at public expenditure proposals, the House must apply the same criterion to its own proposals.
Much design work still needs to be done. The House will want to see the design proposals and to form a view. We must also consult the Royal Fine Art Commission at the appropriate stage and seek planning approval. A rough estimate suggests that another 18 months to two years' design work is necessary and that the construction period could take three or four years. I know that my hon.


Friend the Member for Derbyshire, South will say that that is a long period, but I am confident that she will still be in the House at the end of the construction period.
One has to remember that this development is a little different from the construction of a new car factory in her constituency. Apart from its being a large development, it is a difficult site technically. It is the last remaining site to be developed in the sensitive Westminster-Whitehall area. It provides a backdrop to an internationally famous sight. It is crucial that we get it right, not just for the benefit of the House in functional terms but so that we can show that

this country can produce late 20th century architecture that is worthy of the site. We want it to be something that we can show to the world.
This has been a most helpful debate at an important stage in the timing of phase 2. As a Department of the Environment Minister, I have found it helpful to gauge the feeling of the House. Moreover, the hon. Member for Ogmore has had the opportunity to put his toe in the water and feel the temperature. I conclude by thanking my hon. Friend the Member for Derbyshire, South and colleagues in all parts of the House for a most constructive and helpful debate.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.